Footsie climbs as EU leaders meet to sort out euro zone's debt crisis

FTSE: 5,553.24 (+27.70) Mid-250: 10,422.38 (–5.99) Small Cap: 2,823.60 (+7.71)UK STOCKS rose before euro-area leaders gathered at a summit in Brussels yesterday, as they struggled to solve Europe's sovereign debt crisis.

The FTSE 100 Index climbed 0.5 per cent in London, after swinging between gains and losses more than 10 times yesterday.

“Traders remain jittery and volumes stunted as the market waits for Europe’s leaders to finally put a lid on the debt crisis,” said Manoj Ladwa, a senior trader at ETX Capital. If the outcome of the summit “is deemed inadequate, we could see a return to the volatility of three months ago”.

European leaders are gathering at their summit in a bid to contain the debt crisis that has Greece on the brink of a default. The political leaders seek to bolster the euro area’s €440 billion rescue fund, recapitalise banks and provide debt relief to Greece.

Stocks pared gains yesterday after a European Union official told Bloomberg News that talks with banks on bondholder losses, as part of the second Greek rescue package, were deadlocked and have been suspended.

Gold and silver advanced on concern that policymakers will struggle to resolve the debt crisis, spurring demand for precious metals as a haven.

Randgold Resources advanced 2.5 per cent to 6,880p, Fresnillo climbed 4.4 per cent to 1,654p and African Barrick Gold jumped 4.9 per cent to 551p.

Copper producers also advanced as the base metal increased in London amid speculation that China, the top global consumer of the metal, may lower interest rates.

Antofagasta climbed 2.1 per cent to 1,176p and Kazakhmys gained 1.1 per cent to 929p.

Imperial Tobacco jumped 3.2 per cent to 2,280p, following two days of losses.

British American Tobacco shares rose 1.5 per cent to 2,896p.

Reckitt Benckiser lost 2.1 per cent to 3,260p as ING lowered its recommendation for the company to “hold” from “buy”.

Next lost 2.1 per cent to 2,557p after Deutsche Bank downgraded the clothing retailer.

Elsewhere, Informa gained 3.3 per cent to 367.8p as the publisher of Lloyd’s List reiterated its full-year forecast and reported a 4.2 per cent increase in third-quarter organic revenue.

Berkeley increased 2.5 per cent to 1,250p after Goldman Sachs upgraded the property developer to “buy”. – (Bloomberg)