A rebound in financial stocks helps push shares in London’s blue chip index almost 1.4% higher to 6,552.
Lloyds Banking(LLOY) rises 3.7% to 49.3p, while Royal Bank of Scotland (RBS) trades 3.6% higher to 154.4p as investors take advantage of the recent sell off in the sector. Life insurer Prudential (PRU) improves 3.1% to £11.88.
Overnight gains in Hong Kong, China, India and Australia also help sentiment, though stocks in Japan declined 0.7% on yen strength ahead of a speech by central bank chief Haruhiko Kuroda when markets open in Tokyo tomorrow.
The FTSE 100 was also buoyed by a cautious tone from the Federal Reserve, which has decided to wait for more evidence that the US economy is picking up before raising interest rates.
In corporate news, Sports Direct International (SPD) rebounds 11.3% to 310.3p on relief thatannual numbers revealing an 8.4% drop in underlying profit before tax to £275.2 million aren’t as bad as feared. News the sports retail titan is considering share buybacks following a slump in the share price also helps the stock to rally.
More good news came from Associated British Foods (ABF). The foods-to-fashion conglomerate adds 5.5% at £26.93, the Twinings Ovaltine-to-Primark owner saying its outlook for the financial year has improved.
A further weakening of sterling following the EU referendum means ABF now expects a bigger translational benefit in the final quarter and no longer expects to see a drop in annual earnings per share as a result.
Whitbread (WTB) nudges ahead 0.7% to £34.75 on a sale and leaseback of a Premier Inn hotel in London for £84.5 million with Legal & General. It will pay £3.5 million in annual rent.
But iconic retailer Marks & Spencer (MKS) is marked down 5.3p to 288.8p on a worse-than-expected slump in first quarter clothing sales, reflecting a tougher market, lower prices, fewer promotions and a wash-out June.
Like-for-like sales in M&S's Clothing & Home division slumped 8.9% in the 13 weeks to 2 July and even the Food arm's like-for-like sales were in decline amid deflationary market conditions.
Elsewhere, shares in recruiter Robert Walters (RWA:AIM) gain 3.9% after reporting a 10% rise in net fee income in the second quarter of 2016 at constant currencies. Chief executive Robert Walters, who founded the business, says despite uncertainty in the UK market the financial services specialist is well placed. Walters even delivered strong performance in a UK market which was thought to be struggling ahead of the referendum, with a net fee income increase of 7%.
Recycling outfit Shanks (SKS) dips 11.5% to 71p as it announces a merger with Gansewinkel, a Benelux-focused waste management business. The complex deal will involve a cash consideration of €236 million (£202 million), financed by debt, an equity raise of £90 million and shares. Shanks' shareholders will maintain a 71% stake in the combined entity, subject to terms and take-up of the equity issue.
Stratmin Global Resources (STGR:AIM) jumps 25% to 1.88p after deciding to sell its graphite mining operations for up to A$15.25 million to Bass. It will become a cash shell.
Keras Resources’ (KRS:AIM) shift of equipment to a higher grade gold mining project fails to excite investors with the shares falling 4.3% to 1.13p. The market appears disappointed with the lack of information on gold production.
Cancer-focused drug developer ValiRx (VAL:AIM) nudges 1.6% higher to 7.7p after selling the rights to its TRAC technology and its Finnish subsidiary for €800,000. The company, which bought the diagnostic for €75,000 in February 2015, will continue to use TRAC under licence in developing its therapeutics.
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