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MENAFN - ProactiveInvestors - Australia - 28/11/2012

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(MENAFN - ProactiveInvestors - Australia) Banking stocks provided the muscle for a mini-revival from the UK's blue chips on the day that investors digested a bailout for debt-laden Greece.

Royal Bank of Scotland (LON:RBS) led the way, up 3.5%, with Lloyds (LON:LLOY) not far behind, rising 2.8%, making up for Monday's sell-off, which saw banks drop the most.

RBS got a boost from UBS, which suggested that the part state-owned bank stands to benefit the most from the appointment of Mark Carney, current head of the Canadian central bank, as the next Bank of England governor.

The Swiss broker upgraded the stock to 'buy' from 'neutral' today as its state ownership means it should reap the rewards from Carney's arrival next summer.

It comes as a deal has finally been agreed between euro zone finance ministers and the International Monetary Fund (IMF) about a bailout for struggling member Greece, which was agreed at last.

They have given the thumbs up to a deal to cut its debts by ‚40bn (32bn) by 2020 and hand it the next slice of bailout cash.

Michael Hewson, senior analyst at CMC Markets, said: "Today's gains in equity markets on the back of last night's so called Greek deal have been tempered by uncertainty about how the buyback will be financed and questions surrounding the numbers with respect to debt sustainability."

Nevertheless the news still sent the UK's leading share index up 13 points or 0.22% leaving it just under the 5,800 mark.

Elsewhere however, the OECD (Organisation for Economic Cooperation and Development) put a dampener on things by slashing its 2013 growth forecasts for the world's advanced economies.

It warned that the risk of a serious global recession could yet be on the horizon.

It added that if the US fails to dodge the fiscal cliff " a series of tax hikes and spending cuts due to come into play in January " the already weak US economy could slip into recession.

Miners initially also got a boost from the Greek news but fell away towards the close.

The biggest loser on the top flight was Aberdeen Asset Management (LON:ADN), down 2.2%, while publisher Pearson (LON:PSON), which recently struck a deal to merge its retail division, Penguin, with Bertelsmann's Random House, slipped 1.4%.

Elsewhere, stem cell specialist ReNeuron (LON:RENE) was up 9% to 2.1p by the close of play, while Seeing Machines (LON:SEE) was up 14% at 2p after its chairman predicted its ground-breaking eye monitoring technology will be at the centre of new developments in computing and entertainment.

Mexico-focused Arian Silver (LON:AGQ) signed an exclusive contract to use a newly refurbished process plant that is expected to boost recoveries significantly, prompting shares to rise more than 11% to 18.3p.

Meanwhile, Mitchells & Butlers (LON:MAB) lost 5% to 313p when investors spat out shares in the pubs and restaurants owner, which posted flat like-for-like sales last year.

The biggest loser of the day however was Falkland Oil & Gas (LON:FOGL), which lost almost half its market value after it revealed the Scotia well would not yield a commercial discovery.

While strong gas shows were encountered during drilling and 50 metres of hydrocarbon bearing intervals were identified, the reservoir was found to be "fairly poor quality".


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