London's Footsie pared gains in the afternoon but still finished the day nearly 1% higher as easing fears over the Eurozone crisis kept the blue chip index firmly in positive territory. Despite closing some 50 points below the best levels of the day, the Footsie has gained 7.49% over the last week, rising from 5,165 last Friday to 5,552 today.

Interestingly, a Reuters poll has forecasted the FTSE 100 to fall to 5,400 by mid-2012. Meanwhile, Citi has predicted that the index could jump to 6,200 by the end of next year.

TOUGH WORDS FROM EUROZONE LEADERS

Speaking in Berlin, German Chancellor Angela Merkel told German politicians that the rules governing membership of the Eurozone should be "binding" and talked of "real automaticity" in the application of punishments for breaching fiscal rules. This noticeably did not happen in the build-up to the current crisis.

She also told the Bundestag this morning: "Anyone who, a few months ago, had said that at the end of the year 2011 we would have taken very serious and concrete steps towards a European stability union, a European fiscal union, for introducing such drastic intervention, would have been considered crazy. Now, this is exactly what's on the agenda. We're almost there" [translation by the Guardian].

Meanwhile yesterday, French President Nicolas Sarkozy insisted on the need for governmental convergence amidst the Eurozone members. "There can't be a single currency without (these) economies heading towards more convergence."

Comments made on Wednesday by Ollie Rehn, the EU's Economic and Monetary Affairs commissioner that there were "10 days to save the euro" have suggested to markets a plan is being coordinated ahead of the EU heads of government summit scheduled for the 9th of December.

In other news, the US Labor Department revealed that the jobless rate fell from 9% to 8.6 in November, a two-and-a-half year low. However, this was in part due to the 315,000 people who had stopped looking for work last month. Non-farm payrolls rose by 120,000.

BANKS IN DEMAND, DEFENSIVES SOLD OFF

The banking sector, a category typically sensitive to the outlook for the global economy - and more recently, developments in the Eurozone - was the best performing sector today, after comments from European leaders over 'fiscal union' helped to ease fears over the sovereign debt crisis.

The STOXX Europe 600 Banks index rose by 4.22% today as lenders across Europe made gains. Banks in the UK were no exception with Barclays, Lloyds and Royal Bank of Scotland (RBS) rising by at least 5% each. RBS announced today that it is to sell its tenanted pub business of 918 pubs to the Scottish and Newcastle Pub Company (S&NPC) for £418m.

Defensive stocks were being sold off today, as risk appetite increased. As such, the electricity and utilities sectors were out of favour, with Severn Trent, SSE, National Grid and Centrica among the worst performers of the day on the FTSE 100.

On the FTSE 250, set-top box manufacturer Pace rose strongly after Collins Stewart issued a buy note which said: "Pace's major hard drive supplier Western Digital last night reported that it is resuming hard disc drive (HDD) production this week, earlier than it expected when the Thai floods first hit. It also forecast market-topping revenue of $1.8bn (compared with consensus of $1.2bn) for the current quarter to December 31. This can only be regarded as a positive development for Pace." Shares rose over 11%.

Document and patent translation specialist SDL wasn't far behind having reached an agreement on the terms of a recommended cash acquisition of Alterian, the Bristol-based firm which makes content creation software.

BC

FTSE 100 - Risers
Barclays (BARC) 190.65p +7.62%
ICAP (IAP) 369.00p +7.17%
Essar Energy (ESSR) 245.40p +7.16%
Amec (AMEC) 943.00p +6.92%
Lloyds Banking Group (LLOY) 25.39p +5.79%
Royal Bank of Scotland Group (RBS) 21.63p +5.26%
Glencore International (GLEN) 410.95p +4.77%
Kazakhmys (KAZ) 956.00p +4.14%
BHP Billiton (BLT) 2,000.50p +4.03%
Aviva (AV.) 320.80p +3.62%

FTSE 100 - Fallers
Severn Trent (SVT) 1,498.00p -3.54%
SSE (SSE) 1,274.00p -3.34%
National Grid (NG.) 607.50p -3.19%
Morrison (Wm) Supermarkets (MRW) 316.70p -1.92%
BT Group (BT.A) 185.50p -1.85%
Centrica (CNA) 296.30p -1.79%
Rolls-Royce Group (RR.) 720.50p -1.77%
United Utilities Group (UU.) 613.00p -1.68%
Sainsbury (J) (SBRY) 299.10p -1.35%
International Power (IPR) 332.00p -1.19%

FTSE 250 - Risers
Carpetright (CPR) 438.60p +12.43%
Pace (PIC) 57.25p +11.06%
Home Retail Group (HOME) 98.40p +8.85%
Computacenter (CCC) 366.00p +8.06%
SDL (SDL) 630.50p +7.59%
Berkeley Group Holdings (BKG) 1,360.00p +7.34%
Aquarius Platinum Ltd. (AQP) 183.20p +6.70%
ITE Group (ITE) 207.00p +6.37%
Anglo Pacific Group (APF) 278.60p +6.25%
Supergroup (SGP) 520.00p +5.69%

FTSE 250 - Fallers
SThree (STHR) 221.80p -9.10%
Michael Page International (MPI) 365.00p -3.92%
Exillon Energy (EXI) 265.00p -3.67%
JD Sports Fashion (JD.) 675.00p -3.57%
Kenmare Resources (KMR) 34.12p -3.07%
Elementis (ELM) 148.00p -2.95%
Drax Group (DRX) 534.50p -2.91%
Pennon Group (PNN) 691.00p -2.88%
Thomas Cook Group (TCG) 16.21p -2.88%
Berendsen (BRSN) 423.40p -2.82%

Related share prices
Barclays (BARC) share price
Centrica (CNA) share price
Lloyds Banking Group (LLOY) share price
Royal Bank of Scotland Group (RBS) share price
SSE (SSE) share price
Severn Trent (SVT) share price
Pace (PIC) share price
SDL (SDL) share price
Alterian (ALN) share price
National Grid (NG.) share price