US reporting season gets off to positive start with upbeat statement from aluminium producer
Mining shares, which have lost almost a quarter of their value this year on fears of a Chinese slowdown, were back in demand after better than expected figures from Alcoa.
The aluminium producer kicked off the US second quarter reporting season with a larger than forecast profit and positive comments about future demand.
So miners are dominating the risers in the leading index, with Anglo American adding 43p to £12.88, Fresnillo up 28.5p at 949.5p and Vedanta Resources rising 31p to £10.39.
Adding to the buoyant mood was a short term fix for Greece, with eurozone finance ministers agreeing a $3bn bailout loan after the usual tortuous discussions.
In the UK, there were signs of health in the retail and housing markets, although figures just released show a bigger than expected trade balance in May.
But in China, inflation rose by more than expected, putting more pressure on the central bank as economic growth shows signs of slowing. Ishaq Siddiqi, market strategist at ETX Capital, said:
European share markets looking chirpy again, extending Monday's gains as sentiment continues to improve. Global investors continue to ride the wave of optimism painted by the stronger US jobs data out on Friday together with the Bank of England and European Central Bank pledging to stand behind easing measures. Asian markets put in a good performance overnight following losses in the previous session, helping to support prices here in Europe but Chinese shares failed to gather pace as inflation data from the country indicated slowing growth.
China's slowing growth fears have been put aside in Europe this morning as investors are comforted by Alcoa kicking off the US earnings season by beating expectations.
So the FTSE 100 has added 78.10 points to 6528.17.
Among the other risers Weir has added 71p to £21.75 after Morgan Stanley moved its rating from underweight to equal weight with a £21.50 price target. The bank said:
Weir has done significantly better in oil and gas than we expected, and our estimates are no longer markedly different from consensus, despite our lingering concerns on the minerals side. The skew of risk and reward is now balanced.
But Marks & Spencer has dropped 7.9p to 451.8p following news that like-for-like sales had fallen for the eighth successive quarter.
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