Footsie up on hopes of Greek debt deal while Pace plunges on profit warning

FTSE: 6,018.89 (+76.20) Mid-250: 12,055.15 (+159.06) Small Cap: 3,299.04 (+28.38): THERE WAS a reminder of the disruption caused to global supply chains by the Japanese earthquake on London's equities market yesterday.

It came as the FTSE 100 took heart from hopes that there would be a fresh deal to address Greece’s troubled fiscal position.

But shares in Pace Micro, the FTSE 250 set-top box maker, fell 39 per cent to 92p after it issued a profit warning, saying the problems with exports from Japanese ports had taken such a toll on its business in the first half of the year that it would not be able to make up for it in the second half.

BG fell the most on the FTSE 100 after the energy company’s first-quarter profit fell in line with weaker production levels.

The stock lost 1.6 per cent to £13.79 after pre-tax earnings in the period fell 8 per cent due to the civil unrest in north Africa, Australia’s floods and the government’s tax increase on UK energy production.

The oil and gas explorer also said it now expected “modest” production growth over the full year, although it stood by its growth potential from prospects in Brazil, USA and Australia.

London’s main index rose on reports that Greece had agreed a new rescue package, easing fears that it was considering leaving the euro zone, even as the report was denied by Greek officials.

“The issue surrounding the potential restructuring of Greece’s debt bailout remains an issue and trading is likely to be sensitive to any news on the matter, particularly anything that appears to be a confirmation of the speculation that a restructuring is on the cards,” said Giles Watts, head of equities at City Index.

The FTSE 100 made gains of 76 points, taking it to 6,018.89, a rise of 1.3 per cent, with miners and banks in the vanguard of the broad-based advance. Only four constituent stocks were lower in closing trade.

Imperial Tobacco rose 3.1 per cent to £22.19 after it raised its dividend by 6 per cent and announced plans to buy back £500 million of stock.

InterContinental Hotels also reported well-received numbers. Its first-quarter profit rose ahead of expectations, growing 35 per cent, helped by a rebound in room bookings as the global economic recovery gathered pace. Shares in the operator of the Crowne Plaza and Holiday Inn chains rose 3.9 per cent to £12.89. – (Copyright The Financial Times Limited 2011)