FTSE breaches 5,900 on Greek deal; miners rally

Britain’s FTSE strengthened to close above 5,900 as international creditors weighed up the strict austerity package passed by Greek politicians overnight.

The benchmark UK index of blue-chip shares rose 0.91%, or 54 points, to 5,906 and the Mid-250 index strengthened 0.97%, or 108 points, to 11,276.

Miners topped the FTSE leader board as commodity prices rose. Evraz (EVRE.L) added 12.9p, or 3.1%, to 425p; Anglo American (AAL.L) gained 70.5p, or 2.6%, to £28.17; and Eurasian (ENRC.L) took on 17.5p, or 2.6%, to 702p.

See the FTSE’s performance and the index’s top winners and losers.

Creditors mull deal

Markets across Europe were lifted as worries about a disorderly Greek default faded.

But despite the severe austerity measures already in place to save €3.3 billion from the budget, there is more to be done, and politicians have until Wednesday to sign an agreement on how the next €325 million in cuts will be made. Private sector bond cuts have also yet to be agreed.

Michael Hewson, senior market analyst at CMC Markets, said: ‘The private sector involvement needs to be ratified in order that the necessary paperwork is in place for next month’s 20 March deadline and €14.5 billion bond redemption, though there has been some talk that this afternoon of some sticking points that have yet to be ironed out.

‘Many hurdles remain, not least written confirmation that Greek politicians won’t try and unpick the deal after an April election, but markets seem to think that Europe’s finance ministers may well blink and agree to the release of funds to avoid an imminent default.’

Markets in Europe were spurred ahead on the development: Germany’s DAX index crept ahead 0.68% to 6,739, France's CAC 40 index inched up 0.34% to 3,385, and the FTSEurofirst 300 index of top European shares took on 0.6% to 1,070.

Stateside markets got off to a positive start, tracking gains made in European on the back of the Greek deal.

The Dow Jones Industrial Average bounded ahead 0.48% to 12,863, the Standard & Poor's 500 index hopped up 0.55% to 1,350, and the Nasdaq Composite index advanced 0.8% to 2,927.

Sterling slipped 0.4% against the dollar to $1.5779, and held its ground against the euro at €1.1941.

The dollar index, which tracks the greenback’s performance against a basket of major currencies, slipped 0.3%, to 78.880c.