FTSE gains 0.7% on Irish bailout

The FTSE 100 advanced 0.67% or 38.68 points to 5,771.51 as investors responded positively to news Ireland has agreed to a bailout.

In a move aimed at bringing financial stability to peripheral Europe, Ireland is understood to be receiving €80-90bn over the course of the next three years.

The euro also strengthened on the news, gaining $1.3745 in London this morning from $1.3673 in New York on Friday.

After dragging the index into negative territory last week, this morning mining shares were the biggest risers. Xstrata gained 1.97% to £13.45 while Kazakhmys grew 1.86% to £14.77 and Fresnillo rose 1.63% to £14.31.

Bank shares also saw early morning gains, Barclays rising 1.53% to 278.4p, Lloyds Banking Group increasing 1.53% to 67.62p, HSBC adding 1.14% to 665p and Royal Bank of Scotland up 0.62% to 42.03p.

Detractors included the tobacco giants on news the Government is considering forcing companies to sell cigarettes in plain packages.

Imperial Tobacco Group dropped 0.25% to £20.08, while British American Tobacco fell 0.19% to £24.23.

In Europe, Germany's Dax rose 0.81% to 6,898.82, while France's CAC 40 advanced 0.85% to 3,892.82.

On Wall Street Friday, the Dow Jones was largely unchanged, up 0.2% or 22.32 points to 11,203.55 as China's Central Bank raised bank reserve requirements for the second time in two weeks in a bid to control inflation.

In Japan, the Nikkei 225 reached a fresh five month high as the yen continued to weaken against the US dollar.

The index closed up 0.93% or 92.8 points to 10,115.19 while the yen weakened to ¥83.57 from ¥83.35.