London shares open higher after NY gains overnight, banking stocks gains

Leading shares opened higher as Wall Street gained yesterday after JPMorgan lifted its offer for Bear Stearns to 10 usd per share from 2 usd with banks the major risers on the FTSE 100.

At 8.45 am, the FTSE 100 index was up 174.3 at 5,669.5 after closing for the Easter break 50.4 points lower at 5,495.2, while the FTSE 250 index was ahead 277.4 points at 9,725.8. Volume was strong with 307 mln shares changing hands in 96,569 deals.

"We are seeing everything a bit better today on the back of Bear Stearns getting a higher offer and good housing numbers out the US suggesting their might be an end in sight to the squeeze," said Mark Priest, head of equity sales at Tradindex.

"This has all filtered down to the UK market today with banking stocks strong," added Priest.

In the US yesterday, Wall Street closed sharply higher as investors applauded a new agreement that will give Bear Stearns' shareholders five times the payout that was set in a JPMorgan Chase & Co buyout deal a week ago.

Investors were also pleased by a stronger-than-expected housing report, and sent the Dow Jones industrial average up nearly 190 points while also selling bonds sharply lower.

The Dow Jones industrial average closed 187.32 points higher at 12,548.64. Separately, the Standard & Poor's 500 index rose 20.37 points to 1,349.88 and the Nasdaq composite index gained 68.64 points to 2,326.75.

Asia was also tracking the gains made on Wall Street, the Nikkei 225 index closed up 265.13 points at 12,745.22, while the Hang Seng index closed up 1,356.30 points at 22,464.52.