FTSE up 0.3% as financials rally on euro zone hope

* Financials higher on hopes of euro zone debt solution

* Bank of England inflation report eyed

* Autonomy slides on bond issue

By David Brett

LONDON, Feb 10 (BestGrowthStock) – Britain’s top share index rose
0.3 percent in early trade on Wednesday, led by financials which
rallied on hopes a solution to euro zone debt worries could be
imminent.

By 0907 GMT, the FTSE 100 (.FTSE: ) was up 16.74 points at
5,128.58, having finished 0.4 percent higher on Tuesday.

European governments have agreed in principle to help
Greece, German coalition sources told Reuters on Tuesday. A
German government spokesman later dampened hopes by saying a
decision had not yet been reached. [ID:nSGE61801C]

European Union leaders will hold a special summit on the
economy on Thursday.

Banks and life insurers, which have been hit hardest as
investors have speculated on potential exposure to the eurozone
debt issue, were among the blue-chip leaders.

Europe’s biggest bank HSBC (HSBA.L: ) added 1.4 percent,
while Barclays (BARC.L: ), Lloyds Banking Group (LLOY.L: ) and
Standard Chartered (STAN.L: ) were 2.1-4.3 percent higher.

Insurers Aviva (AV.L: ), Resolution (RSL.L: ) and Legal &
General (LGEN.L: ) gained 0.2-4.2 percent.

“Some of the worry that Greece would be left on its own has
gone out of the market,” said David Morrison, market strategist
at GFT Global. “But I think investors need to be wary. We are
responding to rumour and we are not entirely sure how these
talks are going to pan out,” he said.

The FTSE rally echoed moves in the United States and Asia
overnight, which rose on the Greek rescue plan reports.

Utility companies were also on the front foot, led higher by
Centrica (CNA.L: ), which rose 2.4 percent as Morgan Stanley
raised its recommendation and upped its target price.

The broker also raised its target price for National Grid
(NG.L: ), which gained 0.5 percent, while Severn Trent (SVT.L: ) and
United Utilities (UU.L: ) up 0.2 percent and 0.5 percent
respectively.

RECKITT RISES

Consumer goods group Reckitt Benckiser (RB.L: ) climbed 2.3
percent after saying it expected good growth in 2010, as it
posted in-line fourth-quarter results. [ID:nLDE61818W]

The world’s largest interdealer broker ICAP (IAP.L: ) extended
its recent rally following heavy falls after a profit warning on
Friday, rising 3.8 percent and helped by a Goldman Sachs
upgrade.

On the economic front, investors were awaiting an
announcement from the Bank of England, due at 1030 GMT, which
was widely expected to see the central bank revise down its 2010
growth forecasts and revise up its near-term inflation profile.

Governor Mervyn King was also expected to shed light on the
Monetary Policy Committee’s decision last Thursday to pause its
200 billion pound quantitative easing program.

Before that, at 0930 GMT, data for British manufacturing
output was expected to show a pick-up in December, after a
disappointing flat reading in November.

The broader measure of industrial output was also expected
to have risen modestly, buoyed by energy use stemming from the
unusually cold weather.

The mining sector (.FTNMX1770: ), which shed over 8 percent
last week, was mixed following reults from BHP Billiton (BLT.L: ).

BHP Biliton (BLT.L: ) fell 0.7 percent after the miner
signalled caution over a sustained global recovery and held off
from a share buyback after reporting its weakest first-half
profit in four years. [ID:nSGE61800Z]

Rio Tinto (RIO.L: ), which reports results on Thursday, fell
0.3 percent, but Fresnillo (FRES.L: ), Xstrata (XTA.L: ),
Antofagasta (ANTO.L: ) and Anglo American (AAL.L: ) rose 0.1-1.3
percent.

Among fallers, software company Autonomy (AUTN.L: ) fell 5.4
percent after launching a 500 million pound convertible bond
offering to fund acquisitions and pay down debt. [ID:nLDE61908Y]

Stock Market Today

(Editing by Dan Lalor)

FTSE up 0.3% as financials rally on euro zone hope