Banks are leading the way higher as the market continues its attempt at optimism ahead of the festive period.
A lot seems to be riding on the take-up of the European Central Bank's three year loans, which is designed to ease the pressures on beleaguered eurozone banks. Whatever the outcome, it is helping to lift the sector ahead of the results due to be announced this morning.
Lloyds Banking Group is topping the FTSE 100 risers, up 0.87p to 24.49p. There is also a positive note out from Exane BNP Paribas, which has hoicked up its recommendation on Lloyds from underperform. Exane said:
If economic conditions stabilise and Lloyds is able to avoid raising capital, the valuation of the core business starts to look highly compelling.
It said Lloyds' balance sheet looks far stronger than in 2008 when full nationalisation seemed a real possibility. Close behind Lloyds are Royal Bank of Scotland, rising 0.66p to 20.33p, and Barclays, 5.15p better at 176.55p.
The FTSE 100 is currently 25.70 points higher at 5445.30, as investors shrug off downbeat comments from the Bank of Japan and a rise in the country's trade deficit in November. Could the so-called (sorry) Santa Rally really be on the cards? Owen Ireland, a broker at Valbury Capital, cautioned:
We have to remember that fundamentally we haven't been in a situation like this before. It's all very well to have positivity before many economies take a week's festive break, but there is chatter that any gains might be short lived.
Technology stocks are under pressure following disappointing results from US group Oracle overnight, as investors dumped the sector indiscriminately. So Sage is down 4.4p at 287.4p while Arm is off 7p at 569p.
