Markets rally in London and New York

Markets rallied on both sides of the Atlantic today as equities fought back from recent punishing declines.

Banks and miners drove a 2.7% recovery on London’s FTSE 100 Index – up 135.5 points to 5076.2 – while positive economic data in the US helped fuel the rally.

America’s Dow Jones Industrial Average gained more than 100 points soon after opening, boosted by news that new US homes sales increased to their highest level since May 2008 last month.

Investors were also buoyed by an upbeat report showing US demand for “big ticket” manufactured goods rose 2.9% in April.

Today’s gains were much-needed after falls in the previous session took the Footsie to levels not seen since last September on the back of fresh European debt worries and heightened military tensions in Korea.

The bounce back today was being led by a recovery for the mining and banking sectors caught in yesterday’s sell-off.

An upbeat note on the bank sector from broker Credit Suisse added to the positive sentiment, with the group declaring that “UK banks are investable and at current levels offer value”.

Part-nationalized Lloyds Banking Group lifted 3.3p to 53.8p, followed by Barclays, ahead 18.7p to 302.5p, and taxpayer-backed Royal Bank of Scotland, up 2.6p to 45.3p.

Among miners, Kazakhmys led the way with a 83p hike to 1155p, while Lonmin added 124p to 1685p.

Telecoms services firm Cable & Wireless Worldwide was another strong riser in London after delivering the first set of figures since its demerger, which met market expectations. Shares were 5.1p higher at 81p, a gain of 7%.

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