FTSE soars as Obama unveils US stimulus

Shortly before 10am, the index had advanced more than 4.5% to climb above 4,250 thanks in large part to impressive gains for Prudential.

Analysts last week said the insurer's capital and liquidity remain adequate helping the stock climb more than 12% on Monday.

Construction supplier Wolseley and natural gas firm BG Group also made significant gains while Standard Chartered was the only firm hit with a noteworthy loss.

Shares in Lloyds TSB are also up over 10% this morning as investors await the start of a legal challenge against the group's takeover of HBOS.

A self-appointed group of businessmen, bank customers and shareholders called the Merger Action Group (MAG), has launched the appeal arguing the acquisition will be bad for Scotland's economy.

MAG is set to contest the acquisition and will challenge whether the government were right to bypass competition concerns in allowing HBOS to be rescued.

A HBOS spokesperson says the company is confident the appeal will be unsuccessful. It is due to complete before HBOS shareholders vote on the deal on Friday 12 December.

Barack Obama announced a bailout of the US carmakers over the weekend which will help to alleviate fears of yet more redundancies although it is yet to be seen what impact this will have on Wall Street.

The President-elect's announcement also sparked a surge in Japanese stocks, sending the Nikkei 225 Stock Average to the steepest jump in two weeks.

The Nikkei climbed more than 411 points, or 5.2%, to 8,329.05 at the close in Tokyo, the biggest rally since 25 November.

IFAonline

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