Morning markets: FTSE up ahead of Merkel-Sarkozy meeting

British stockmarkets advance in early trading, ahead of a key meeting between the French and German leaders and after Italy approves new measures to tackle its debt crisis.

The FTSE 100 was up 18.10 points immediately after opening, taking the index to 5,570.39, while the FTSE 250 was advanced 53.90 to 10,361.22 and the FTSE 350 rose 10.28 to 2,934.34.

Later today Angela Merkel, the German chancellor, and Nicolas Sarkozy, the French president, will meet to discuss solutions to the eurozone debt crisis, with greater fiscal union expected to be one of the main topics of debate.

In addition, the new technocratic government in Italy approved a package of spending cuts and reforms to help lower its growing debt burden. Mario Monti, the prime minister, described the measures as a “multitude of sacrifices” to save Italy.

The FTSE’s gains were led by financials, with Lloyds being the index’s strongest riser at 0813 GMT. The bank was up 4.92% to 26.64p. Royal Bank of Scotland rose 4.25% to 22.55p, while Barclays was up 3.54% to 197.40p.

Insurer Aviva and mining company Vedanta were other strong risers.

The morning’s top fallers were led by medical devices company Smith & Nephew. Reckitt Benckiser, Randgold Resources, Arm Holdings and AstraZeneca completed the top five falls in early trading.

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