London shares closed higher on Thursday as investors took heart from news that Ireland could become the first eurozone nation to emerge from its bailout programme and US jobless claims declined for a third straight week, dealers said.
The benchmark FTSE 100 index gained 47.91 points or 0.74 percent to end the day at 6,529.41 points.
“European stock indices are all trading higher, buoyed by the prospect of Ireland becoming the first country to exit the bailout program later this year,” said analyst Craig Erlam at traders Alpari.
On Wednesday, Ireland returned to the 10-year bond market for the first time since it benefited from an international bailout in 2010, raising almost double the amount predicted by analysts.
Dublin raised five billion euros ($6.48 billion) in an auction, while the rate of interest was 4.15 percent, the country’s National Treasury Management Agency said.
“Ireland completed its first auction of 10-year bonds yesterday, as it moved a step closer to exiting the bailout program, which has been viewed in the markets as the first time we?re seeing the positive side to austerity,” added Erlam.
“This also marks a shift from austerity to growth for Ireland which gives hope to other countries currently in the program.”
The decline in US unemployment benefit claims — a sign of the pace of layoffs — added to market optimism.
According to the Department of Labor, claims totalled 332,000 in the week ending March 9, a drop of 10,000 from the prior week.
Max Cohen, a financial sales trader at Spreadex, had a more pessimistic view of the London market saying: “Many analysts are starting to believe that the recent rally that has propelled the UK 100 to five year highs could stall as investors are beginning to see limited upside potential.
“Miners have fallen with investors concerned over China given its recent indication that inflation concerns could take precedence over a pro-growth stance. The sector is down some 2 percent in 2013, against a more than 10 percent advance on the FTSE 100.”
Rio Tinto dropped 1.95 percent to 3,312 pence, Evraz lost 1.87 pence to 246.30 pence and Fresnillo eased 1.82 percent to 1,457 pence.
However, most other FTSE sectors enjoyed rises. Temporary power specialist Aggreko surged 6.85 percent to 1,965 pence to top the leader board as telecoms company BT rang up a 4.36 percent gain to 277.40 pence. High Street retailer Marks & Spencer displayed a 3.49 percent rise to 371.60 pence.
On the currency markets, sterling strengthened to $1.5085 at 4:47 pm after trading below $1.50 on Wednesday and rose to 1.1601 euros, its highest close of the week.
London shares close higher on Irish optimism
