The FTSE opened more than 30 points up Thursday as investors were buoyed by Spanish plans to tackle its budget crisis, a host of strong trading updates and a rally on Wall St.
Shortly after opening, the index was up more than 50 points, or 0.95%, to 5,434.71, as investors began their first full day under a David Cameron-led coalition Government.
The new Government moved quickly to appease markets yesterday with plans to cut the UK's budget deficit £6bn this financial year, a move backed by Bank of England governor Mervyn King.
This morning, UK stocks were also boosted after earnings from J Sainsbury and BT Group beat analysts' estimates.
Sainsbury advanced 2.9% after posting an 18% rise in pretax profit while BT, the UK's largest phone company, advanced 5.6% after saying operating profit climbed.
Asian stocks advanced on Spain's budget plans and overnight gains on Wall Street.
In Tokyo, the main Nikkei 225 index rose by 231 points, or 2.2%, to 10,625, while shares in China, Singapore, South Korea and Australia also gained ground.
Spanish Prime Minister Jose Luis Rodriguez Zapatero yesterday announced a 5% cut to public sector salaries, as well as reductions to pensions and regional government funding.
Zapatero said the measures would save the country €15bn (£12.5bn) over two years.
Spain's budget deficit currently stands at 11% of GDP, and the austerity measures are designed to reduce this to 6% by 2011.
The Asian rally followed a big day on Wall Street, where the Dow Jones climbed 148.65 points, or 1.4%, to 10,896.91 - the highest level since 4 May.
All-day event on 24 April
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AFH has six segregated mandate funds
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