Leading shares are heading for their highest close for two weeks after the G20 meeting over the weekend agreed to keep economic stimulus in place until a recovery was assured.
This renewed investors' appetite for risk, with banks and miners both benefiting. So Wall Street has risen around 120 points in early trading, while the FTSE 100 is currently up 92.82 points at 5235.54.
Royal Bank of Scotland is leading the way, up 2.71p at 39.77p, although analysts are still wary of the business. Jonathan Pierce at Credit Suisse said:
The difficulty with putting a recommendation on RBS is that the shares remains well below where we see tangible net asset value troughing (i.e. around 45-50p) which should support the price. But that trough won't occur for 18-24 months on our numbers, and we don't see earnings per share much higher than 5-6p in 3-4 years time. Furthermore, with Government owning 39bn ordinary shares and a further 51bn B shares, the overhang is substantial. We remain on underperform for now, although clearly the shares have fallen a long way.
Miners are also proving a positive influence on the market, as the weaker dollar pushes up metal prices - gold is at yet another new high.
So Kazakhmys has climbed 78p to £12.91 and Rio Tinto has risen 152p to £30.69. Fresnillo is up 42.5p to 881p and Xstrata has added 50.5p to £10.13.
Now Kraft has finally made its hostile bid for Cadbury, the phoney war has ended and the real battle can begin. As expected Kraft has stuck to its original proposal, but with the recent slide in its share price, the terms of the cash and share offer have fallen since the bid was first made. Cadbury, of course, has dismissed the Kraft move - no surprise since it had already rejected what was in effect a higher offer in the first place. In the market its shares have climbed 1p to 759p on the theory that Kraft will have to pay more if it wants to succeed or that a rival bidder - having seen the colour of Kraft's money - could now come out of the wordwork.
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