Banking and mining shares are lifting the market higher, with investors encouraged by hopeful signs from the eurozone and Ben Bernanke's comments hinting the US Federal Reserve will maintain measures to boost the country's economy.
Barclays is up 8.7p at 256.35p as chief executive Bob Diamond gives a investor presentation in London. According to reports he is making confident noises, saying Barclays has had an encouraging start to the year in both its investment banking and retail businesses.
Royal Bank of Scotland has risen 1.8p to 29.55p in the wake of reports that talks were underway about selling a stake in the bailed out bank to a sovereign wealth fund in Abu Dhabi. Ian Gordon at Investec said:
It is a source of mild amusement to us that the UK government and/or UKFI didn't see 58p as a suitable selling price in August 2009 or April 2010, yet a rebound to 28p (from 17p) is allegedly the trigger for a (partial) sale of its 82% stake to Abu Dhabi in 2012. We won't hold our breath. That said, the emergence of a (potential) marginal buyer of size is welcome, and in addition to RBS' visibly improving capital and funding position, it has the capacity to act as a further source of downside protection.
Lloyds Banking Group - the other state controlled bank - has been lifted 0.91p to 36.45p.
Meanwhile mining groups have been lifted by a rise in base metals following the comments on Monday from Federal Reserve chairman Bernanke. Rio Tinto has risen 54.5p to £34.19 while Kazakhmys has climbed 25p to 950p following an increase in full year profits from $1.59bn to $1.62bn.
But Resolution has dropped 18.9p to 256p after profits were boosted by a one-off gain from outsourcing. The insurer is also looking at a plan to split itself in two to maximise shareholder benefits.
Compass, the catering group, is also in decline, down 9p at 659p after a cautious trading update. The company said sales would slow in the first half compared to last year, due to the challenging economic conditions in the UK and Europe.
Overall, though, the FTSE 100 has made a positive start, up 31.28 points to 5933.98.
