FTSE on the rise after Italy vows to wind up failed banks
London's top flight index pushed higher on Monday, with UK banks enjoying a strong session after the Italian government committed 17 billion euro (£15 billion) to wind up two failed banks.
The FTSE 100 Index closed up 22.67 points at 7,446.8 as investors cheered a move by Italian ministers to split Veneto Banca and Banca Popolare di Vicenza into "good" and "bad" banks.
Shares in Royal Bank of Scotland rose 4.2p to 249.8p, while Barclays climbed 2.4p to 199.9p and HSBC stepped up by 8.2p to 688.9p.
Blue-chip stocks enjoyed a boost following the announcement that Theresa May had reached an agreement with the Democratic Unionist Party (DUP) to prop up her minority Government.
Strength returning to the oil price also provided some uplift to the London market. Brent crude was up 0.6% at 45.79 US dollars (£36) a barrel.
Connor Campbell, Spreadex financial analyst, said: " Though Brent crude saw a rather sizeable reversal - it was up nearly 1.5% and above 46 US dollars per barrel just after the bell, only to plunge more than half a per cent as investors lost their bottle - the FTSE held firm to its own 0.6% growth.
"That BP and Shell didn't follow the commodity into the red helped the index, as did the confirmation of a confidence-and-supply deal between the Tories and DUP ahead of the Queen's Speech vote.
"The most crucial factor, however, was the substantial gains managed by the banking sector - all bar Lloyds - in the aftermath of the 17 billion euro Italian bailout."
Sterling was marginally up versus the US dollar at 1.271 on the news that Mrs May had struck a deal to bring political stability to the UK.
Under a "supply and confidence" arrangement intended to last for the full Parliament, the DUP guarantees its 10 MPs will vote with the Government on the Queen's Speech, the Budget and legislation relating to Brexit and national security.
Together with the 317 Tory MPs remaining after Mrs May's disastrous decision to call a snap election, this will give the Prime Minister just enough MPs to clear the 326 level required for an absolute majority in the House of Commons, ensuring her victory in key divisions.
However, the pound still struggled against the euro, slipping 0.1% to 1.137, as figures from the banking sector showed consumer borrowing had eased back last month.
The British Bankers' Association (BBA) found consumer credit had dropped to 5.1% in May, down from 6.4% in April, in response to a smaller take-up of personal loans and overdrafts.
The appetite for borrowing on credit cards also shifted down a gear to 5.5% from 6.4% over the period, reflecting May's drop in retail sales.
In UK stocks, Costa Coffee-owner Whitbread was in the ascendancy after Morgan Stanley hiked its earnings per share forecast by 1%. Shares in Whitbread were up 86p to 4,045p.
The biggest risers on the FTSE 100 Index were Whitbread up 86p to 4,045p, International Consolidated Airlines Group up 12.5p to 611p, Royal Bank of Scotland up 4.2p to 249.8p, TUI up 17p to 1,150p.
The biggest fallers on the FTSE 100 Index were Fresnillo down 50p to 1,555p, Antofagasta down 21p to 751p, Provident Financial down 41p to 2,399p, Randgold Resources down 115p to 7,000p.