Headline shares stormed ahead in midday trade, with sentiment boosted by news of an EU deal to protect European finances and in anticipation of an imminent deal to form a new UK government. At high noon, the FTSE100 was up 253.54 points at 5,376.56 with the FTSE250 ahead 456.14 points at 9,948.03 and the FTSE Smallcaps 64.63 points better at 2,850.8. US stock futures jumped, taking a lead from the strong gains across European markets. Dow Jones Industrial Average futures surged 390 points, S&P500 futures added 51.1 points at 1,158 and Nasdaq 100 futures rose 84.75 points at 1,933.2.

LONDON MARKETS

As widely anticipated, the BoE Monetary Policy Committee elected to keep UK interest rates at the record low of 0.5% and maintain the stock of asset purchases financed by the issuance of central bank reserves at £200bn.

Markets in London stormed ahead in morning trade as investors welcomed an EU package of measures to stabilise the eurozone, including the creation of a 720bn stability fund.

Banking shares led the charge, with Barclays (LON:BARC) topping the leaderboard with a rise of 44.75p (15.8%) at 328.45p. Lloyds jumped 7.58p at 61.11p and Royal Bank Of Scotland Group Plc (LON:RBS) gained 6p at 51.5p.

Insurer Prudential (LON:PRU) gained 16p at 559p as it moved close to a final deal with the FSA which would give the go-ahead for its planned acquisition of AIA.

Aviva (LON:AV.) and Legal & General Group (LON:LGEN)& also made strong progress, ahead 31.9p at 335.3p and 6.25p at 81.85p, respectively.

Fund managers were also in the ascendancy on the new enthusiasm for financial issues, with Man Group (LON:EMG) up 21.3p at 231.4p and Schroders (LON:SDR) rallying 73p at 1,402p.

Mining shares recovered strongly, with Vedanta Resources (LON:VED) the best of them, up 250p at 2,566p on revealing it has acquired Anglo American (LON:AAL) Zinc for $1.338bn. Anglo rose 219.5p at 2,721p in response.

BHP Billiton (LON:BLT) gained 123p at 1,987.5p on reports it is to take a leaf out of Rio Tinto's book and place some of its plans for expansion in Australia on hold in reaction to the planned 40% supertax. Rio Tinto (LON:RIO) soared 251p at 3,378.5p.

Lonmin (LON:LMI) surged 95p at 1,780p on reporting a much improved financial performance in…

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