Eurozone finance ministers meeting in Brussels on Tuesday provides hope for resolution in Greece and sends FTSE 100 up 132 points
Rumours, hearsay and a dreadfully poor time on the FTSE last week, has seen the leading index close up an impressive 132 points, 2.4%, at 5738.
Not the most impressive list of reasons for the rise, investors appear to be after a bargain, while talk of the fiscal cliff being fixed in the US over the weekend has yet to be shot down.
The final reason for the jump appears to come from Europe with the rumours of "will they, won't they" solve the problems in Greece a meeting in Brussels tomorrow, finished the day leaning towards a possible solution.
According to Reuters, eurozone finance ministers will give a "tentative go-ahead" on Greece's aid disbursement.
Analyst David Madden, at IG Markets explained:
After last week's bloodbath equities are stronger for a variety of reasons: short covering, high hopes for Greek aid and optimism surrounding the fiscal cliff. On Friday the FTSE was near a four-month low, but a combination of short covering and bargain hunters has brought the market back from below the 5600 level.
Everybody loves to buy cheap stocks but traders need the right motive and the likelihood of Greece receiving the next tranche of the bailout was the perfect excuse. Members of the Troika will argue among themselves about the terms of the deal for Greece, but when push comes to shove Athens will be given the money; it's hardly a monetary union if one member is allowed to go bust.
Although the creditors would like to safeguard their loans, if Athens defaults it could be the beginning of the end for the eurozone.
To a lesser extent there is some bullish news coming from the US regarding the fiscal cliff. Democrats and Republicans have said they are going to put their differences aside to work on a package to avoid falling off the fiscal cliff, but outside of increasing the debt ceiling I don't know how they are going to do it.
So, not entirely positive.
In companies news, the day finished much how it started, with Barlcays leading the way, closing up 15.6p, 6.6%, at 249.8p, after Goldman Sachs wrote a positive note, creating the expected effect.
A hodgepodge of miners, computer chip makers, oil companies and a retailer made up the other biggest risers.
At the other end, only four of the FTSE 100 companies lost value.
Melrose, the engineering turnround specialist, was down 2p at 210p, suffering the aftershocks of its profit warning on Friday.
G4S dropped 1.7p to 241.7p as Credit Suisse cut its rating on the company following UK prison contract losses.
While Pennon Group, down 1.5p at 596.3p and Shire, down 2p at £17.24 were the other only fallers of the day.
Not much corporate news tomorrow, but keep an eye out for EasyJet which recently won its first landing slot to fly to Moscow.
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