The FTSE 100 closed at 5,403 at midday, up 98.8 points (1.86 per cent) from Monday’s close.

UK stocks rallied in the morning after the International Monetary Fund (IMF) urged the Bank of England to cut rates or expand its £325 billion quantitative easing programme to support economic growth.

In addition, demand for equities was spurred by optimism ahead of tomorrow’s EU summit in Brussels and reported in Chinese media, which said the country has decided to fast-track the approval of infrastructure projects to support economic growth.

European leaders will meet in Brussels on Wednesday to discuss the debt crisis and the political situation in Greece, which could potentially exit the euro zone if anti-austerity parties secure enough votes to form a coalition in the upcoming election.

It is expected that French President Francois Hollande will propose issuing common euro area bonds, an idea that is staunchly opposed by German Chancellor Angela Merkel.

“This won’t be the first time Euro bonds will have been mentioned to the German leader, who is adamant that they are not the solution,” said market analyst at City Index Fiona Cincotta.

“However with the potential consequences of Greece exiting the shared currency weighing ever closer, perhaps Monsieur Hollande has more chance than ever for pushing the idea.”

Gains in the UK’s blue chip index were curbed by today’s dismal retail sales data, which unexpectedly showed a 12.6 per cent drop for April due to heavy rainfall.

In other news, the Organisation for Economic Co-operation and Development (OECD) has raised its growth forecast for the UK economy for 2013 to 1.9 per cent from 1.8 per cent, while leaving its prediction for the current year unchanged at 0.5 per cent.

Silver miner Fresnillo (LON:FRES, up 5.4pct at 1,390p) topped the FTSE 100 index followed by Royal Bank of Scotland (LON:RBS, up 5.3pct at 21.9p) and engineering group Weir Group (LON:WEIR, up 5.3pct at 1582p).

Mining companies did well after copper prices rose on the news from China.

Antofagasta (LON:ANTO, up 4.5pct at 1,076p) and Rio Tinto (LON:RIO, up 4pct at 2,936p) were the best performers in the sector this afternoon.

Other notable risers included home improvement retail Kingfisher (LON:KGF, up 3.9pct at 284.1p) and chipmaker ARM Holdings (LON:ARM, up 2.5pct at 489.8p).

Meanwhile, hedge fund manager Man Group (LON:EMG, down 1.5pct at 77.65p) was at the bottom of the FTSE 100 pile with retailer Morrison Supermarkets (LON:MRW, down 0.9pct at 268.0p).

US markets

US equities were off to a positive start this morning, tracking gains in European markets.

The Dow Jones Industrial Average (DJIA) rose 13 points (0.1 percent) to 12,517 and the broader S&P 500 index rose four points (0.3 percent) to 1,320.

The most followed stock in US markets, Facebook (NASDAQ:FB) continued its freefall today, shedding a further seven percent to drop below US$32 per share compared with its IPO price of US$38.

The social network joined the NASDAQ exchange last Friday following what was the third largest IPO in history, which valued the business at US$104 billion.

On the macroeconomic front, the National Association of Realtors will release existing home sales data for April later today.

UK corporate news

Back in the UK, retailer Marks & Spencer (LON:MKS, up 0.6pct at 340.3p) today reported that its profits fell for the first time in three years as it also cut sales growth targets for the current year because of the uncertain economic outlook.

The clothing and luxury food group now expects to increase revenue by £1.1 billion to £1.7 billion next year after originally targeting growth of £2.5 billion.

Pre-tax profits for the year to the end March fell 16 per cent to £658 million compared to last year’s figure of £781 million.

Total group sales were up 2 per cent at £9.9 billion, while in the UK the company reported an increase in like-for-like sales of 0.3 per cent, driven by a strong performance by food.

Vodafone (LON:VOD, up 4.12pct at 171.8p) also released its full year figures today.

The telecom giant warned profits will remain flat next year reflecting the difficult European consumer environment.

Adjusted operating profit, which was £11.5 billion this year, is expected to be between £11.1 billion and £11.9 billion in 2013. 

Pre-tax profits rose 0.5 per cent to £9.6 billion in the year to end March, but fell by 10 per cent on an underlying basis.

A strong performance from the company’s 45 per cent-owned US arm Verizon Wireless helped boost revenue by 1.2 per cent to £46.4 billion.

Fellow FTSE 100 constituent, oil and gas engineering firm Petrofac (LON:PFC, up 4.14pct at 1,583p), has secured a US$220 million contract from Malaysian state owned company Petronas for the refurbishment of the Bekok-C platform in Block PM9.

“This project also represents a considerable step forward for Petrofac as we develop our leading engineering, procurement and construction (EPC) capability offshore through our Offshore Project & Operations business,” said chief executive of Petrofac’s ECOM division Marwan Chedid.

Today, the spotlight was on Cluff Natural Resources (LON:CLNR), which started trading on the AIM market this morning.

Entrepreneur Algy Cluff told Proactive Investors that he hoped that by the end of July his new venture would have snapped up the first of its investment deals, on its journey towards building a global resource player.

And he said he hoped these deals would be, "within a relatively short space of time", cash positive.

"One of them is likely to be in the North Sea, and one in Africa," Cluff told Proactive Investors.

"What I'm looking for is actual, or imminent cash flow," he said.

The company, which is focused on oil and gas and mining assets, was launched in the City this morning having raised £3.75 million before expenses in what Cluff said was a "heavily oversubscribed" placing.

It issued 75 million new shares at 5 pence per share and issued 35 million warrants.

Cluff explained, however, that cash was not key to the firm's onward development, as some of the firm's proposed transactions will be for shares.

Cluff Natural Resources plans to make use of the veteran oil man’s extensive experience and contacts he has made over the last 40 years to source opportunities.

It believes the UK North Sea still draws major investment interest and that Africa is positioned to become the second fastest growing region in the world.

Getting busy again in the North Sea sees Cluff going back from whence he came (he founded Cluff Oil in the 1970s) - something he is relishing, though he noted things there "have changed very much".

"Having been a fairly hostile environment to the small companies, it's now becoming quite a benign environment," he told Proactive.

"Twenty- to thirty years years ago, it was frowned on for small companies to farm out their obligations - now they are positively encouraged to do that," he said.

Proactive also drew investors’ attention to potash group Elemental Minerals (ASX:ELM, TSX:ELM), which has taken a very restrained approach to marketing itself since it started developing the project about three years ago.

And this has been a deliberate strategy, according to Iain Macpherson, chief executive of the group, which owns the Sintoukola potash property in the Republic of Congo.  

“The project is good, so we have taken the decision to get our heads down and let it speak for itself,” said Macpherson.

The story was introduced to a new audience au fait with the dynamics of the potash market recently via its listing in Canada. 

The TSX IPO raised about C$61 million, which will fund the group through its bankable feasibility study scheduled for next April.

In terms of outside interest in the project, the preliminary feasibility, due for publication in August or September this year, may prove pivotal.

“The PFS is not a traditional go, no-go decision point for the company,” said Macpherson. 

“It is more a marketing process for future project finance requirements or capital requirements.”

So far, exploration work has focused on the Kola deposit, which represents 60 square kilometres of a possible 1,400.

Even so it has delivered a 43-101 sylvinite resource of 413 million tonnes in the measured and indicated catagories with a further 261 million tonnes in the inferred mineral resource category. 

This is the key component of a potash resource of just over 959 million tonnes in the measured and indicated categories, with a further 513 million tonnes in the inferred mineral resource category.

“We are exclusively focussed on the highly sought after sylvinite resource,” said Macpherson.

“And despite having examined only a very small section of the Sintoukola property we have already confirmed sufficient sylvinite tonnage to support a long life production of two million tonnes a year of finished potash, which is a vital ingredient in fertiliser.” 

Two other reports from Proactive covered today’s news from energy group Wasabi Energy (LON:WAS), which has received approval to buy into an advanced geothermal power generator in Turkey from the current owner, and coal miner Ncondezi Coal (LON:NCCL).

Ncondezi this morning unveiled a major overhaul of its board, including the appointment of a new chairman and chief executive, ahead of the development of its coal project in Mozambique’s Tete Province.

Michael Haworth, a former managing director of mining and metals corporate finance at the blue-chip American bank JP Morgan, becomes chairman, replacing Richard Stuart, who will remain on the board as a non-executive director.

So too will CEO Graham Mascall, who will be replaced in that role by the company’s chief operating officer, Nigel Walls. 

Paul Venter, who has 39 years mining experience across Africa, Mongolia, China and Russia, has been drafted in as COO.

In his role TSX-listed Prophecy Coal Corp Venter oversaw the successful commissioning of the Ulaan Ovoo coal mine in Mongolia just six months after acquiring the asset.

Haworth said: "I would like to thank Richard and Graham for successfully guiding and transforming Ncondezi over the past two years. 

“I am pleased that they have agreed to remain on the board so we will continue to have access to their expertise and advice."

Meanwhile, Wasabi’s Turkish subsidiary Imparator Enerji signed an option to take a 50 per cent stake in the Tuzla Geothermal Power Project (TGPP) in April subject to partner and regulatory approval.

TGPP owner and operator Enda Enerji has now given its go-ahead, though the exercise of the option remains subject to the project lender's consent as well as regulatory approvals, Wasabi said.

The total consideration for the option is US$11.75 million (including a US$5 million loan note).

The project includes an operating 7.5 MWe geothermal power plant in Canakkale Turkey, with opportunities to expand further.

Historical studies indicate geothermal power generation potential of up to 80 MWe said Wasabi, which has started work on a pre-feasibility study for the development of a first stage 14 - 17.5 MWe build-out.

Wasabi will develop the project with Enda, which is an experienced power plant developer and operator in Turkey. 

The TGPP covers an area of approximately 11sq km of a very shallow and relatively high temperature geothermal zone in North Western Turkey and hosts a recently installed and currently operating 7.5 MWe power plant. 

The Tuzlageothermal field has also been extensively studied and drilling has confirmed the TGPP as a major regional geothermal resource.

Wasabi added the proposed 14 - 17.5 MWe first-stage build-out at the TGPP may utilise its Kalina Cycle technology, which has the potential to increase power generation at the project by 20 per cent.

Wasabi said the option and development work would be funded through asset sales and other capital raising initiatives.

In other news, retail giant Marks and Spencer's (LON:MKS) profits fell for the first time in three years while it cut its sales growth targets because of the uncertain economic outlook.

The clothing and luxury food group now expects to increase revenue by £1.1 billion to £1.7 billion next year, after originally targeting growth of £2.5 billion.

Chief executive Marc Bolland said: “While conditions in the UK are predicted to be more difficult than originally forecast, we are on track to deliver both international and multi-channel targets.”

Pre-tax profits for the year to the end of March fell 16 per cent to £658 million compared to last year’s figure of £781 million.

Total group sales were up two per cent at £9.9 billion, while in the UK the company reported an increase in like-for-like sales of 0.3 per cent, driven by a strong performance in food.

With the “increasingly challenging consumer backdrop” in mind M&S launched its ‘value’ food range, Simply M&S this month.

The company said it also had a record year in kidswear while womenswear had a more mixed performance partly due to merchandising issues in the third quarter.

Like-for-like sales of general merchandise suffered, down 1.8 per cent on the previous year.

Gold fell today as the US dollar rose, lifted by today’s decision by Fitch to downgrade the world’s third largest economy Japan to A-plus from AA due to concerns about its high debt to GDP ratio.

The move boosted the US dollar’s safe haven appeal, while reducing demand for gold, which is seen as an alternative investment to the greenback.

The American currency also benefitted from caution ahead of tomorrow’s summit of euro zone leaders.

It is expected that common euro area bonds will be among the key issues discussed at the meeting in Brussels. France is strongly in favour of euro zone bonds, which are, however, opposed by the monetary union’s largest economy Germany.

Gold traded at US$1,588/oz, down US$4 from Monday’s close. Platinum moved in the same direction as gold, falling US$5 to US$1,459/oz, while silver added 28 to reach US$28.75/oz.

Today’s top risers in the sector were:

Orosur Mining (LON:OMI), up 15.5 percent at 40.95 pence at midday

Bezant Resources (LON:BZT), up 10 percent at 24.19 pence

Centamin (LON:CEY), up 7 percent at 69.47 pence

Fresnillo (LON:FRES), up 5.5 percent at 1,394 pence

Aureus Mining (LON:AUE), up 4 percent at 56.25 pence

The top fallers were:

Greatland Gold (LON:GGP), down 11 percent at 1.02 pence at midday

Vatukoula Gold Mines (LON:VGM), down 9 percent at 42.25 pence

Oxus Gold (LON:OXS), down 5.5 percent at 2.48 pence

Oil futures were headed in different directions today with Brent crude inching high in London and the West Texas Intermediate (WTI) benchmark in the US dropping on expectations of another increase in America’s crude stocks.

A Reuters poll projected this week’s US oil inventories figures to show a buildup of one million barrels. Last week, the Department of Energy said crude stocks rose 2.1 million barrels to 381.6 million barrels, the highest level in more than two decades.

While US futures fell, Brent crude advanced, driven by optimism ahead of tomorrow’s EU summit and reports that China has decide to fast-track the approval of infrastructure projects to support economic growth.

European leaders will meet in Brussels on Wednesday to discuss the debt crisis with traders hoping for an agreement on measures to support growth.

French President Francois Hollande has proposed issuing common euro area bonds to resolve the fiscal crisis, however, this suggestion has been rejected by the euro zone’s largest contributor of financial aid Germany.

 Oil prices received more support from another round of sanctions against Iran imposed by the US Congress on Monday.

The Middle Eastern country, which is accused of illegally developing a nuclear weapon, has been hit by a series of sanctions by the US and Europe, resulting in a decline in its oil exports.

US light, sweet crude for July delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), declined 25 cents to US$92.61/barrel in morning trade in New York.

July Brent crude climbed 24 cents to US$109.05/barrel on the ICE Exchange this afternoon.

Today’s top risers in the oil and gas sector were:

Gold Oil (LON:GOO), up 32.5 percent at 5.41 pence at midday

Xcite Energy (LON:XEL), up 18 percent at 103.9 pence

Lochard Energy (LON:LHD), up 12 percent at 9.4 pence

Trap Oil (LON:TRAP), up 10 percent at 27 pence

Serica Energy (LON:SQZ), up 7 percent at 24.85 pence

The top fallers were:

Frontera Resources (LON:FRR), down 12.5 percent at 0.74 pence at midday

Gasol (LON:GAS), down 7 percent at 0.51 pence

Egdon Resources (LON:EDR), down 6 percent at 7.27 pence

Matra Petroleum (LON:MTA), down 5.5 percent at 2.5 pence

UK stocks rallied this morning after the International Monetary Fund (IMF) urged the Bank of England to cut rates or expand its £325 billion quantitative easing programme to support economic growth.

The FTSE 100 stood at 5,365 at midday, up 61 points (1.15 percent) from Monday’s close.

In addition, demand for equities was spurred by optimism ahead of tomorrow’s EU summit in Brussels and reported in Chinese media, which said the country has decided to fast-track the approval of infrastructure projects to support economic growth.

European leaders will meet in Brussels on Wednesday to discuss the debt crisis and the political situation in Greece, which could potentially exit the euro zone if anti-austerity parties secure enough votes to form a coalition in the upcoming election.

It is expected that French President Francois Hollande will propose issuing common euro area bonds, an idea that is staunchly opposed by German Chancellor Angela Merkel.

“This won’t be the first time Euro bonds will have been mentioned to the German leader, who is adamant that they are not the solution,” said market analyst at City Index Fiona Cincotta.

“However with the potential consequences of Greece exiting the shared currency weighing ever closer, perhaps Monsieur Hollande has more chance than ever for pushing the idea.”

Gains in the UK’s blue chip index were curbed by today’s dismal retail sales data, which unexpectedly showed a 12.6 percent drop for April due to heavy rainfall.

In other news, the Organisation for Economic Co-operation and Development (OECD) has raised its growth forecast for the UK economy for 2013 to 1.9 percent from 1.8 percent, while leaving its prediction for the current year unchanged at 0.5 percent.

Engineering group Weir Group (LON:WEIR, up 4.6pct at 1572p) was the top riser in the FTSE 100 index, following by silver miner Fresnillo (LON:FRES, up 3.6pct at 1,367p) and cruide operator Carnival (LON:CCL, up 3.5pct at 2,061p).

Mining companies did well after copper prices rose on the news from China.

Antofagasta (LON:ANTO, up 3.4pct at 1,065p) and Rio Tinto (LON:RIO, up 3.1pct at 2,909p) were the best performers in the sector this afternoon.

Other notable risers included home improvement retail Kingfisher (LON:KGF, up 3.3pct at 282.2p) and chipmakerARM Holdings (LON:ARM, up 3pct at 492.5p).

Meanwhile, hedge fund manager Man Group (LON:EMG, down 1.9pct at 77.3p) was at the bottom of the FTSE 100 pile with retailer Morrison Supermarkets (LON:MRW, down 1.4pct at 266.6p).

US markets

US equities were off to a positive start this morning, tracking gains in European markets.

The Dow Jones Industrial Average (DJIA) rose 13 points (0.1 percent) to 12,517 and the broader S&P 500 index rose four points (0.3 percent) to 1,320.

The most followed stock in US markets, Facebook (NASDAQ:FB) continued its freefall today, shedding a further seven percent to drop below US$32 per share compared with its IPO price of US$38.

The social network joined the NASDAQ exchange last Friday following what was the third largest IPO in history, which valued the business at US$104 billion.

On the macroeconomic front, the National Association of Realtors will release existing home sales data for April later today.

UK corporate news

Back in the UK, retailer Marks & Spencer (LON:MKS, up 1pct at 341.6p) today reported that its profits fell for the first time in three years as it also cut sales growth targets for the current year because of the uncertain economic outlook.

The clothing and luxury food group now expects to increase revenue by £1.1 billion to £1.7 billion next year after originally targeting growth of £2.5 billion.

Pre-tax profits for the year to the end March fell 16 per cent to £658 million compared to last year’s figure of £781 million.

Total group sales were up 2 per cent at £9.9 billion, while in the UK the company reported an increase in like-for-like sales of 0.3 per cent, driven by a strong performance by food.

Vodafone (LON:VOD, up 3pct at 170.2p) also released its full year figures today.

The telecom giant warned profits will remain flat next year reflecting the difficult European consumer environment.

Adjusted operating profit, which was £11.5 billion this year, is expected to be between £11.1 billion and £11.9 billion in 2013. 

Pre-tax profits rose 0.5 per cent to £9.6 billion in the year to end March, but fell by 10 per cent on an underlying basis.

A strong performance from the company’s 45 per cent-owned US arm Verizon Wireless helped boost revenue by 1.2 per cent to £46.4 billion.

Fellow FTSE 100 constituent, oil and gas engineering firm Petrofac (LON:PFC, up 3.7pct at 1,576p), has secured a US$220 million contract from Malaysian state owned company Petronas for the refurbishment of the Bekok-C platform in Block PM9.

“This project also represents a considerable step forward for Petrofac as we develop our leading engineering, procurement and construction (EPC) capability offshore through our Offshore Project & Operations business,” said chief executive of Petrofac’s ECOM division Marwan Chedid.

UK stocks rallied this morning after the International Monetary Fund (IMF) urged the Bank of England to cut rates or expand its £325 billion quantitative easing programme to support economic growth.

The FTSE 100 stood at 5,365 at midday, up 61 points (1.15 percent) from Monday’s close.

In addition, demand for equities was spurred by optimism ahead of tomorrow’s EU summit in Brussels and reported in Chinese media, which said the country has decided to fast-track the approval of infrastructure projects to support economic growth.

European leaders will meet in Brussels on Wednesday to discuss the debt crisis and the political situation in Greece, which could potentially exit the euro zone if anti-austerity parties secure enough votes to form a coalition in the upcoming election.

It is expected that French President Francois Hollande will propose issuing common euro area bonds, an idea that is staunchly opposed by German Chancellor Angela Merkel.

“This won’t be the first time Euro bonds will have been mentioned to the German leader, who is adamant that they are not the solution,” said market analyst at City Index Fiona Cincotta.

“However with the potential consequences of Greece exiting the shared currency weighing ever closer, perhaps Monsieur Hollande has more chance than ever for pushing the idea.”

Gains in the UK’s blue chip index were curbed by today’s dismal retail sales data, which unexpectedly showed a 12.6 percent drop for April due to heavy rainfall.

In other news, the Organisation for Economic Co-operation and Development (OECD) has raised its growth forecast for the UK economy for 2013 to 1.9 percent from 1.8 percent, while leaving its prediction for the current year unchanged at 0.5 percent.

Engineering group Weir Group (LON:WEIR, up 4.6pct at 1572p) was the top riser in the FTSE 100 index, following by silver miner Fresnillo (LON:FRES, up 3.6pct at 1,367p) and cruide operator Carnival (LON:CCL, up 3.5pct at 2,061p).

Mining companies did well after copper prices rose on the news from China.

Antofagasta (LON:ANTO, up 3.4pct at 1,065p) and Rio Tinto (LON:RIO, up 3.1pct at 2,909p) were the best performers in the sector this afternoon.

Other notable risers included home improvement retail Kingfisher (LON:KGF, up 3.3pct at 282.2p) and chipmaker ARM Holdings (LON:ARM, up 3pct at 492.5p).

Meanwhile, hedge fund manager Man Group (LON:EMG, down 1.9pct at 77.3p) was at the bottom of the FTSE 100 pile with retailer Morrison Supermarkets (LON:MRW, down 1.4pct at 266.6p).

Oil and gas group Ithaca Energy (LON:IAE) showed upon the list of top searches on Google Finance and was among the most actively discussed companies on bulletin boards due to persistent takeover speculation.

Investors noted that the group said earlier this month that it was in talks with potential suitors and had set a deadline for final bids, adding that it expected to provide an update within four weeks.

Speculation that an update on takeover talks is due imminently coupled with expectations of first oil from the Athena field drove shares up from below 150 pence to 173 pence yesterday, putting it among the top risers in the oil and gas sector.

Today’s top risers included Bellzone Mining (LON:BZM), whose shares jumped 26 percent to 23 pence in morning trade after the mining group secured regulatory approval to start commercial production from the Forécariah operations.

The company plans to initially mine and export two million tonnes of high grade material identified by internal resource modelling during the first year of operations, aiming to reach the design capacity of four million tonnes per annum by the end of the year.

Post the initial two million tonnes, the low grade oxide will be upgraded to produce a 58 percent Fe product.

Bellzone added that it is currently in talks over off-take agreements.

“The ability to bring a greenfield asset into production, build a trans-shipping port and haulage road in under 15 months is a significant achievement,” said chief executive of Bellzone Nik Zuks.

“The JV will continue to grow the resources and its production capacity as an operating entity.

“Bellzone now has a significant interest in an operating entity combined with a globally significant resource under development at our flagship Kalia iron mine.”

In contrast, African Copper (LON:ACU) dipped 12 percent to 1.88 pence after it was revealed that an equipment failure has forced it to halt copper production at the Mowana mine in Botswana.

The failure, which occurred over the weekend, has rendered the facility inoperable until a new pinion shaft is installed.

The mill is expected to be out of operation for at least 12 days, while other mining activities including drilling, load and haul, and ore transportation are expected to continue to plan.

The crushing sections at the Mowana mine facility will continue running with the aim of filling both the coarse and fine product stockpiles with the higher grade Thakadu ore, with a view to building the ore stockpiles in front of the mill.

This will allow the plant to run at a higher throughput once the mill is repaired, added African Copper.

The update from African Copper was on the list of the most read RNS statements along with today’s announcements from Baltic Oil Terminals (LON:BTC) and Max Petroleum (LON:MXP), which has spudded another well in Kazakhstan.

Max has started drilling the ASK-J2 development well in the Asanketken field in Block E, which will be drilled to a depth of 1,400 metres, targeting Jurassic reservoirs.

A week ago, the previous well on Asanketken, ASK-J1, reached its total depth with logs indicating 36 metres of net oil pay with excellent reservoir quality.

The ASK-J1 well will be completed and placed on test production.

Meanwhile, BTC has raised£950,000 via a share placing to fund its fuel oil optimisation project at the refined product terminal in  Aabenraa, Denmark.

The project, which has a total budget to €1.2 million, is expected to be completed by the end of the year, while ensuring that present capacity remains unaffected by the modifications and allowing continuity of operations for the rest of 2012.

The shares were placed at a price of 13 pence per share, a 5.5 percent discount to Monday’s closing price.

The group also told investors that its 2011 results are expected to be in line with expectations.

HomeServe (LON:HSV) and Yell Group (LON:YELL) also garnered interest today as shares in both fell sharply after they released full year results.

Yell posted a massive full year loss of £1.4 billion on revenues of £1.6 billion, down 14 percent from the previous year, for the year to end March.

 In addition, the phone directories publisher, which last year launched a four year restructuring programme, told investors that its transition into a predominantly digital business has not progressed as fast as it would like.

HomeServe posted much better full year financial results, which showed that revenues in the year to March surged 14 percent to £535 million and pre-tax profits came in at £138 million, up 2 percent from the previous year as the number of customers increased 14 percent to 2.2 million.

However, shares fell 23 percent to 175.7 pence after confirming it was the subject of a probe by the Financial Services Authority (FSA) over possible mis-selling.

The FSA will investigate “certain historic issues” with the probe expected to take a number of months to complete.

Late last year, the home emergency services provider HomeServe suspended its UK telesales and marketing activities following a review by auditor Deloitte.

In today’s statement, the company said it had identified a number of potential failings in its sales and marketing and complaints handing activities.

“We took swift and comprehensive action to address the issues that we identified in the UK and are totally committed to restoring our customer focus,” said chief executive of HomeServe Richard Harpin.

“We are strengthening our management teams, retraining staff and continuing to make significant investments in customer service.”

The group also noted that it carried out more than 1.6 million repair for customers last year, show it said showed that its products and services “continue to meet real customer needs both in the UK and our International markets”.

Investors in London were focused on the retail sector this morning after Marks & Spencer (LON:MKS) released its final results, which revealed the first decline in its annual profits in three years.

In the year to end March, revenues rose two percent from the previous year to £9.9 billion, but pre-tax profits dipped 16 percent to £658 million, while earnings per share declined to 32.5 pence from 38.8 pence.

The group left its full year dividend unchanged at 17 pence per share.

“Whilst the economic environment has deteriorated since we first set out our strategic plans, we have made significant progress,” said chief executive of Marks & Spencer Marc Bolland.

“Our UK pilot stores are delivering good results, which has given us the confidence to launch phase two of the programme.

“We are well on track to become a truly international multi-channel retailer. By the end of this year we will be transacting from 10 websites worldwide and opening around 100 international stores per year.”

Investors also had a bath of full year reports from small caps including North River Resources (LON:NRRP), Silvermere Energy (LON:SLME) and ZincOx (LON:ZOX) to digest.

North River said it made a “great deal of progress” last year with exploration across its Namibian assets.

The company is now in a strong position to advance development activities at two of its assets, the previously producing Namib lead-zinc project and the Malachite Pan copper deposit.

North River said its conceptual production rates of 250,000 tonnes of ore per year from the Namib mine and production rates of 8,000 tonnes of copper per year from Malachite Pan as “credible target production levels”.

Oil and gas group Silvermere called 2011 a “transformational” year for the company as it saw the acquisition of a 33.3 percent working interest in the Mustang Island gas and condensate field in Block 818-L in the Gulf of Mexico.

Production is currently expected to start this summer.

“The company has come a long way in a short period of time, but much still remains to be done,” said chief executive of Silvermere Energy Andy Morrison.

“The company will soon be a gas and condensate producer and we look forward to expanding through the identification of at or near production, secondary and tertiary oil and natural gas opportunities onshore or shallow offshore the US.”

Meanwhile, the full year report form ZincOx highlighted the US$50 million loan facility secured form Korea Zinc to fund Phase 1 of the Korean Recyclinc Project (KRP) and the completion of the US$110 million construction of KRP1 after the end of the year.

Production started in May and first production of zinc oxide has been delivered to Korea Zinc.

“We are delighted that our first recycling plant is now in operation and that the process has been successfully demonstrated in Korea,” said executive chairman of ZincOx Andrew Woollett.

“We are excited by the prospect of the full ramp up on KRP1 while we start the development of KRP2 and push ahead with working up projects elsewhere in the world.”

Drug discovery and development company e-Therapeutics (LON:ETX) also released its 2011 report today, saying it expects to see the first findings from its new programme of clinical trials before the end of this year.

By the end of next year, it should have phase II data on one drug and phase I data on two more, it said in its full-year results statement. 

It booked a pretax loss of £3,86 million in the year to January 31 2012 compared with a loss of £2.66 million a year earlier, and the results reflect increasing investment in drug discovery and drug development made possible by shareholders’ support of a £16.7 million share placing in March 2011.

In the meantime, Helius Energy (LON:HEGY) posted revenues of £151,000 for the six month period to end March compared with no revenues a year earlier, while pre-tax losses were reduced to £644,000 from £956,000 in the same period last year.

The biomass energy specialist had £4.3 million in the bank at the end of March.

Helius said it is currently finalising contract negotiations for the construction, fuel supply and electricity offtake for the Avonmouth project.

The Rothes project is in construction, on schedule and within budget, the company added.

In other news, Landore Resources (LON:LND) reported that the recently completed drilling programme on the eastern section of the B4-7 deposit has significantly enhanced the volume of B4-7 massive sulphide mineralization.

Drilling to date has consistently intersected massive sulphide mineralisation, returning intersections of 30.08 metres grading 0.74 percent nickel, 0.45 percent copper, 0.07 percent cobalt and 20.17 metres at 0.65 percent nickel and 0.62 percent copper.

Drilling continues on the western section of the B4-7 with completion expected in the third quarter this year.

Landore noted that the B4-7 remains open down dip and along strike to the east and west.

Fellow mining company Mariana Resources (LON:MARL), which is focused on precious metals, has kicked off a 3,500 metre diamond drill programme at its flagship Las Calandrias project in the Santa Cruz Province of Argentina.

The campaign will test new targets identified adjacent to, below and outside the limits of the current Calandria Sur initial resource estimate.

According to the company, information provided by the results of the programme, will be fundamental in the design of a more extensive drill campaign that will take place in the second half of the year.

“This next campaign follows very encouraging target definition work over the last four months which has defined a mix of both high grade and bulk tonnage style targets,” said chairman of Mariana Resources John Horsburgh.

Orogen Gold (LON:ORE) told investors that the Phase 1 drilling programme at its Deli Jovan project in eastern Serbia has commenced.

The programme, which is expected to last six months, will be carried out to confirm further lateral and depth continuity on the mineralised structures discovered at Deli Jovan.

Finally, Ncondezi Coal (LON:NCCL) said this morning that it has decide to restructure its management team. Michael Haworth has been appointed to the board as non-executive chairman, replacing Richard Stuart, who will continue as a non-executive director.

Meanwhile, Nigel Walls, currently chief operating officer, has been promoted to CEO and will join the board as an executive director. He will be replaced by Paul Venter as COO.

“With the DFS progressing well and on track for completion during the third quarter, now is an appropriate time to restructure the management in preparation of the Company's next phase, the financing and development of the Ncondezi Project to production,” said current CEO Graham Mascall, who will step down and join the board as an executive director.

Back to oil and gas, Rialto (LON:RIA) told investors that the Gazelle-P3 ST well offshore Côte D'Ivoire has encountered “encouraging” hydrocarbon shows in the Lower Cenomanian section in addition to previously reported shows in the Upper Cenomanian.

The well is currently logging the two intervals and fluid and pressure samples will be collected after these logs are completed.

This information is required for a proper evaluation of the shows, said Realto.

Another oil and gas group Caza Oil & Gas (LON:CAZA) revealed today that the Sombrero well in New Mexico is flowing oil.

The WC 35 State No. 1 well is operated by CML and Caza has a 20 per cent working interest for a 17.125 per cent production interest in the well.

The well has been perforated and CML reports that it has good fluid entry. There remains 25 per cent of load left and a frac crew is awaited, said Caza, as it updated inverstors on its Mexican operations.

Elsewhere, at the Bradley "29" horizontal well in Eddy county, drilling has reached the primary target and and operator Mewbourne has begun horizontal drilling and reported good mud log shows.

The Quail "16" horizontal well in Lea county, operated by Fasken Oil is at a depth of 10,787 feet aiming for the main horizontal target of Third Bone Spring sand at approximately 10,965 feet.

Peer Petrel Resources (LON:PET) told investors that its non-executive director Stefano Borghi has resigned to pursue other business interests.

In other news, underground coal gasification (UCG) specialist Wildhorse Energy (LON:WHE) has completed a £7.6 million fund raise that will initiate a bankable feasibility study at its Mecsek Hills project in Hungary.

The funds will also be used to help Wildhorse negotiate with the Hungarian authorities over further development of the uranium deposit at Mecsek Hills.

Wildhorse raised the money through a two-tranche placing at 5 pence that raised £5.6 million and a share purchase plan, also at 5 pence, that raised a further £2 million.

UK stocks are expected to rise this morning, pacing overnight gains in Asian and US markets. The FTSE 100 is set to open at 5,342, up 38 points (0.7 percent) from Monday’s close.

Demand for equities was lifted by reports in Chinese media that the country has decided to expedite the approval of infrastructure projects to support economic growth. Copper prices rose on the news, which should prop up mining stocks.

In the meantime, traders are looking to tomorrow’s EU summit in Brussels, hoping that French President Francois Hollande will press for common euro zone bonds.

“Trend followers would have had a field day recently. They will be hoping we either see an escalation of the crisis, or some sort of radical headline to stem the bleeding and turn things around,” said chief market strategist at IG Group Chris Weston.

“It looks as though consolidation is on the cards over the next few days.”

Today’s macroeconomic calendar includes US existing home sales for April and updates on UK consumer and retail price inflation.

Across the Atlantic, the Dow Jones Industrial Average (DJIA) rallied 135 points (1.1 percent) to close at 12,504 and the broader S&P 500 index tacked on 21 points (1.6 percent) to end the session at 1,316.

Likewise, Asian markets were in buying mode today. Japan’s Nikkei 225 advanced 82 points (0.95 percent) to 8,716 and China’s Shanghai Composite Index stood 14.5 points (0.65 percent) higher at 2,363 at the end of today’s session.

Ariana Resources (LON:AAU) stole the limelight today, surging 30 percent after reporting bonanza gold and silver grades from its latest drilling in western Turkey.

The highlight from the Arzu North and South veins in the Kiziltepe sector of the Red Rabbit Project was a 12.1 metre section at 13.1 grams of tonne of gold and 187.6 grams of silver. 

This included 3.2 metres at 38.7 grams of gold and 511 grams of silver and a one metre section at almost 66 grams of gold and 760 grams of silver.

Other intercepts included 34 metres at 1.04 grams of gold equivalent, 7.6 metres at 7.6 grams and 5.8 metres at 5.71 grams.

The City broker Fairfax said: “This is good news for Ariana who are proving up further mineralisation at the Kiziltepe deposit. 

“These high grade drilling results underscore the resource potential at the Red Rabbit project with scope for the JORC resource to expand from the current 448,000 ounces. 

“The company will now be focusing on identifying optimal drilling positions before forestry permits are obtained for a deeper drilling programme in the area.”

The best intercept was from 65-77 metres depth and sits “within a structural jog along the mineralised fault”, Fairfax added. 

The ore shoot has a moderate plunge which would be helpful for open cast mining, it also pointed out.

Managing director Dr Kerim Sener described today’s data as “truly exceptional”.

Proactive Investors also covered today’s news from precious metals miner Stratex International (LON:STI), which said the chip sampling programme at the Pandora gold vein in Djibouti had produced the best results so far seen in the Afar region in the East African country. 

David Hall, executive director for East Africa, said the latest samples confirmed the potential for a high grade gold discovery in the region.

"These extremely exciting results are now the best surface sampling results of any discovery to date in the Afar epithermal province,” he added.

Multi-gramme gold grades showed continuity over more than 1,000 metres of strike, together with well-defined high-grade portions within the structure, he said.

A number of samples returned over 10g/t gold, including a best of 20.35 g/t over 1.9 metres and 12.17g/t over 2.07 metres.

Mineralisation included 13.9 metres at 5.35 g/t, 23.28 metres at 1.52 g/t and 18.31 metres at 1.43g/t.

Stratex is exploring the Afar province with its strategic partner Thani Ashanti, a joint venture between Anglogold Ashanti and Dubai –based Thani.

Another main story by Proactive was dedicated to DiamondCorp (LON:DCP), whose 74 per cent-owned subsidiary Lace Diamond Mines has entered into a loan funding term sheet with the Industrial Development Corporation of South Africa Limited (IDC).

The IDC will grant the subsidiary a loan of 280 million Rand, approximately US$33.6 million, subject to due diligence.

Chief executive Paul Loudon said: ”We are delighted that we and our Black Economic Empowerment (BEE) partners have been able to agree in principle a debt financing proposal from the IDC to provide over 98 per cent of the estimated capital required to establish a block cave development on the 47 level at the Lace mine. 

“This is a significant milestone in DiamondCorp's transition from developer to producer and we welcome the support of the IDC in funding this potentially long-life diamond mine in the Free State Province."

The money will go towards underground development and purchase of mining equipment at the Lace mine.

The term of the loan is expected to be 7 years. 

Subject to completion of due diligence and satisfaction of other conditions, including approval for the upgrade of the electricity supply to the mine by South African utility Eskom, DiamondCorp expects the loan agreement to be finalised by the end of July 2012. 

The group's latest estimate for the total cost of development at Lace is R384 million, around US$46 million, but with revenue expected from diamond sales after 18 months, the peak funding requirement is forecast to be R285 million, or around US$34.1 million.

Proactive also drew investors’ attention to a note from Deutsche Bank, which expects the UK market’s make up and emphasis on oil and gas, mining and pharmaceuticals to give comfort as Europe’s “unfortunate series of events” continue.

Along that theme, the German broker has picked "six of the best" UK companies, which it says can perform in both good and bad times. 

Analyst Mark Braley said: “In the context of Eurozone uncertainty, our theme has been to try to find UK stocks with strong balance sheets and international, non-eurozone, natures.” 

Other than the broker holding a ‘buy’ stance on all six, common traits include dividends and a “fairly modest” performance this year so far.

Drinks company Diageo’s  (LON:DGE) 14 strategic brands account for the majority of group growth and stand it in good stead for the future.

Braley adds that the company has reached a point where gross margin is growing and earnings per share will increase.

Mining giant Rio Tinto (LON:RIO) is undervalued at 2809 pence, with Deutsche's price target 5410 pence.

“We believe that the price does not value the current assets, let alone growth available to Rio and discounts an unrealistic drop in commodity prices,” said Braley.

The broker forecasts that Rio’s current US$ 55 billion investment on five major projects will create an incremental US$43 billion of value and ‘decades of cashflow.’

Premier Oil  (LON:PMO) has underperformed despite a broadly flat oil price and 50 per cent increase in production capability.

Premier, though, is now taking advantage of US$100 oil prices and with the increase in production growth cash generation is rising and adding to its already strong balance sheet.

Biopharmaceutical business Shire (LON:SHP) is included because of its increased market share in the ADHD, attention deficit hyperactivity disorder, market, expansion in gastrointestinal drugs, and an almost doubling of its human genetic therapies business.

“Shire offers growth rates in earnings and cashflow that are attractive and visible.”

Going forward, strong cashflow should enable Shire to redeem its US$1.4 billion convertible in 2014 and complete more mergers and acquisitions.

Live media business UBM (LON:UBM) also makes the top six  it is "sorely under-rated" as it moves away from data services and print and towards events, which now makes up two thirds of group profits.

Deutsche has a target price of 790 pence, compared to a market price of 514.5 pence.

Finally, commodities giant Tate & Lyle (LON:TATE) makes the grade after selling its sugar division and several other bulk businesses, making it less cyclical and generating higher returns.

Traders were reluctant to buy gold today despite a weaker US dollar, which is seen as an alternative asset to the yellow metal.

Demand for gold was dampened by Germany’s continuing opposition to issuing common euro zone bonds to resolve the debt crisis, which was discussed at the G8 summit that took place over the weekend.

The idea is supported by French president Francois Hollande, who is expected to bring the issue up again at Wednesday’s EU summit in Brussels.

In the meantime, the results of recent opinion polls in Greece provided a little support to the euro, while reducing demand for the safe haven US dollar.

It has been reported that the centrist New Democracy and Pasok parties could secure enough votes in the upcoming election to form a coalition, which increases the likelihood of Greece staying in the monetary union.

Last week, coalition talks that followed the inconclusive May 6 polls ended without an agreement, forcing the debt laden country to hold a new election.

Gold traded at US$1,588/oz this afternoon, down US$4 from Friday’s close. Silver moved in the same direction as gold, slipping 47 cents to US$28.25/oz, while platinum rose US$6 to US$1,457/oz.

Today’s top risers in the sector were:

Ariana Resources (LON:AAU), up 28 percent at 3.19 pence at midday

Mariana Resources (LON:MARL), up 19 percent at 6.1 pence

Central Rand Gold (LON:CRND), up 6 percent at 0.689 pence

Oxus Gold (LON:OXS), up 5.5 percent at 2.45 pence

Petropavlovsk (LON:POG), up 5 percent at 411.2 pence

The top fallers were:

ECR Minerals (LON:ECR), down 9.5 percent at 0.5 pence

Condor Resources (LON:CNR), down 7.5 percent at 3.7 pence

Patagonia Gold (LON:PGD), down 7 percent at 26.75 pence

GoldStone Resources (LON:GRL), down 5 percent at 3.92 pence

Bezant Resources (LON:BZT), down 3.5 percent at 21.75 pence

Oil prices rose in tandem with equities on both sides of the Atlantic today after opinion polls showed that Greek pro-austerity parties could secure enough votes in the upcoming election to form a coalition, which bodes well for the country’s chances to stay in th euro zone.

Last week, coalition talks that followed the inconclusive May 6 election collapsed, forcing the debt-laden country to head back to the polls.

It was reported that support for the centrist New Democracy party has topped 20 percent compared to the 18.9 percent of votes the party secured in May.

In the meantime EU countries seem to be at odds over key issues including common euro area bonds with Germany opposing the idea, while calling for further austerity in the euro zone to resolve the debt crisis.

On Wednesday, the EU will hold a summit in Brussels to discuss the possibility of issuing euro zone bonds, while German finance minister Wolfgang Wolfgang Schaeuble and his French counterpart Pierre Moscovici are set to discuss the issue told.

Schaeuble told the Bild newspaper that Greece’s exit from the monetary union could be prevented and that the country had to comply with the terms of the bailout deal.

In addition to optimism that Greece will stay in the euro zone, oil prices were buoyed by reports that South Korea is set to stop buying crude oil from Iran.

The Reuters said Korean refinery SK Energy will stop lifting Iranian oil in July, while Hyundai Oilbank will stop importing oil from the Middle Eastern country from June. 

US light, sweet crude for July delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 54 cents to US$92.02/barrel in morning trade in New York.

July Brent crude rallied US$1.01 to US$108.15/barrel on the ICE Exchange this afternoon.

Today’s top risers in the oil and gas sector were:

Frontera Resources (LON:FRR), up 18.5 percent at 0.8 pence at midday

Ithaca Energy (LON:IAE), up 16 percent at 173 pence

Cadogan Petroleum (LON:CAD), up 14.5 percent at 32.38 pence

Heritage Oil (LON:HOIL), up 9.5 percent at 125.9 pence

Chariot Oil & Gas (LON:CHAR), up 9 percent at 78.89 pence

The top fallers were:

Petrel Resources (LON:PET), down 10 percent at 4.6 pence at midday

Gold Oil (LON:GOO), down 5 percent at 4.18 pence

Sound Oil (LON:SOU), down 4.5 percent at 1.12 pence

Nighthawk Energy (LON:HAWK), down 4 percent at 3.45 pence 

UK stocks rallied this morning despite Germany’s opposition to issuing joint euro zone bonds, which are being proposed by France. The FTSE 100 closed at 5,304 up 37 points from Friday’s close.

At the past weekend’s summit at Camp David, G8 leaders said they wanted Greece to stay in the euro zone and called for a balance between growth boosting stimulus and budget cuts.

However, German Chancellor Angela Merkel again said she wanted Greece to pass more austerity to bring its debt problems under control.

“Too often the markets has seen rhetoric without action and so whilst much of what was said was to be expected, definitive action will be needed before the markets can take this rhetoric in their stride,” said chief market strategist at City Index Joshua Raymond.

“And what’s more, there remains a doubt amongst investors as to whether Merkel would be willing to soften the German stance towards pro-austerity.”

Traders are now looking to today’s meeting between German finance minister Wolfgang Schaeuble and his French counterpart Pierre Moscovici. On Wednesday, EU will hold a summit in Brussels with common euro zone bonds among the topics that are expected to be discussed.

Despite the persisting concerns about the possibility of Greece exiting the euro zone, the UK’s blue chip index rose thanks to support from gains in the mining and banking sectors.

In addition, polls are now showing that parties that support Greece’s membership in the euro zone and further austerity could secure enough votes in the June 17 election to form a coalition.

Vedanta Resources PLC topped the FTSE 100 leaderboard (LON:VED, up 5.2 pct at 1008 pence) after copper prices rose. Also lifted was Xstrata (LON:XTA, down 3.1pct at 943.p).

Meanwhile hedge fund manager Man Group (LON:EMG, up 4.65pct at 78.8p) finished second after acquiring investment group Financial Risk Management (FRM) Holdings.

Other notable risers included engineering group Weir (LON:WEIR, up 2.52pct at 1,503p) and temporary power provider Aggreko (LON:AGK, up 2.5pct at 1,084p).

Banks also were in demand today with Standard Chartered (LON:STAN, up 3.3pct at 1,328.5p) and tax-payer-owned bank Royal Bank of Scotland (LON:RBS, up 4.1pct at 20.8p) showing up among the top risers in the top flight.

Meanwhile, precious metals miners Fresnillo (LON:FRES, down 2.9pct at 1,319p) slid to the bottom of the FTSE 100 pile following a sharp decline in gold and silver prices.

US markets

US stocks were off to a positive start this morning, pacing gains in Asian and European equity markets.

The Dow Jones Industrial Average (DJIA) rose 35 points (0.3 percent) to 12,405 in early trade and the broader S&P 500 index added five points (0.4 percent) to reach 1,300.

All eyes were again on Facebook (NASDAQ:FB), which started treading on the NASDAQ exchange on Friday following the third largest IPO in history that valued the social network at US$104 billion.

This morning, shares in Facebook dipped 13 percent to US$33.29 each compared to the IPO price of US$38 per share.

Today’s macroeconomic calendar is empty with no notable updates due to be released.

UK corporate news

Back in the UK, other news in the top flight included another contract win by engine giant Rolls-Royce (LON:RR., down 0.4pct at 801p).

The group has secured contracts worth US$136 million to supply technology and long-term services support to Dolphin Energy, which transports natural gas from Qatar to the United Arab Emirates and Oman via a 364 kilometre subsea pipeline.

Under the terms of the deal, Rolls-Royce will supply Dolphin Energy with three industrial Trent gas turbine compression packages.

“I am delighted that Rolls-Royce technology has again been selected to support the Dolphin gas project, one of the largest cross border energy infrastructure projects ever undertaken in the Middle East,” said president for energy at Rolls-Royce Andrew Heath.

Fellow blue chip Barclays (LON:BARC, up 2.2pct at 180p) revealed plans to sell its US$6.1 bn stake in BlackRock.

The disposal is by way of an offering and a related buy-back by the US-based asset manager BlackRock.

BlackRock today unveiled the beginning of a secondary offering of its common stock and said it plans to buy back $1billion of its own stock.

The shares being offered by Barclays will be sold in an underwritten public offering.

In the FTSE 250, food company Cranswick (LON:CWK, up 0.8 pct at 825p) and support services group MITIE Group (LON:MTO, up 1.2pct at 275p) reported higher full year revenues and pre-tax profits.

The figures form Cranswick showed an eight percent increase in revenues to £821 million for the year to end March following a “strong recover in the second half from first half challenges”.

Pre-tax profits reached £48.4 million, up three percent from a year earlier, and earnings per share increased to 72.8 pence from 72.8 pence.

The group added that underlying sales were up 10 percent, reflecting growth across most product sectors.

“Against a background of strong raw material price increases early in the financial year and a continued challenging environment for the consumer, the company recovered strongly during the second half and recorded its highest ever sales and second best trading profit in its history,” said chairman of Cranswick Martin Davey.

The report from MITIE, which also covered the year to end March, revealed an 8.9 percent increase in pre-tax profits to £94.5 million on revenues of £2 billion, up 5.9 percent from the previous year.

MITIE said its organic order book has increased 26 percent to £8.6 billion from a year earlier, while the pipeline of potential bid activity stands at £11.2 billion and the group has already secured 83 percent of the revenue budgeted for 2012/13.

UK stocks rallied this morning despite Germany’s opposition to issuing joint euro zone bonds, which are being proposed by France. The FTSE 100 stood at 5,301 at midday, up 34 points (0.65 percent) from Friday’s close.

At the past weekend’s summit at Camp David, G8 leaders said they wanted Greece to stay in the euro zone and called for a balance between growth boosting stimulus and budget cuts.

However, German Chancellor Angela Merkel again said she wanted Greece to pass more austerity to bring its debt problems under control.

“Too often the markets has seen rhetoric without action and so whilst much of what was said was to be expected, definitive action will be needed before the markets can take this rhetoric in their stride,” said chief market strategist at City Index Joshua Raymond.

“And what’s more, there remains a doubt amongst investors as to whether Merkel would be willing to soften the German stance towards pro-austerity.”

Traders are now looking to today’s meeting between German finance minister Wolfgang Schaeuble and his French counterpart Pierre Moscovici. On Wednesday, EU will hold a summit in Brussels with common euro zone bonds among the topics that are expected to be discussed.

Despite the persisting concerns about the possibility of Greece exiting the euro zone, the UK’s blue chip index rose thanks to support from gains in the mining and banking sectors.

In addition, polls are now showing that parties that support Greece’s membership in the euro zone and further austerity could secure enough votes in the June 17 election to form a coalition.

Hedge fund manager Man Group (LON:EMG, up 5.4pct at 79.35p) topped the FTSE 100 leaderboard after acquiring investment group Financial Risk Management (FRM) Holdings.

Other notable risers included engineering group Weir (LON:WEIR, up 2.9pct at 1,508p) and temporary power provider Aggreko (LON:AGK, up 2.4pct at 1,083p).

Banks also were in demand today with Standard Chartered (LON:STAN, up 2.5pct at 1,318p) and tax-payer-owned bank Royal Bank of Scotland (LON:RBS, up 3.4pct at 20.66p) showing up among the top risers in the top flight.

Copper prices rose, lifting mining companies Vedanta Resources (LON:VED, up 4.7pct at 1,004p) and Xstrata (LON:XTA, down 2.1pct at 933.7p).

Meanwhile, precious metals miners Fresnillo (LON:FRES, down 2.8pct at 1,320p) and Randgold Resources (LON:RRS, down 1.1pct at 4,842p) slid to the bottom of the FTSE 100 pile following a sharp decline in gold and silver prices.

Oil companies Frontera Resources (LON:FRR) and Chariot Oil and Gas (LON:CHAR) rose sharply this morning as they provided positive operational updates, while Torotrak (LON:TRK) was among the most actively discussed companies on message boards after unveiling a licence deal in Japan.

Frontera Resources topped the list of the most popular searches on Google Finance with investors looking for the reason behind the surge in the share price, which climbed 15 percent to 0.78 pence in early deals.

The Republic of Georgia focused explorer and producer said in a stock exchange statement today that it expects a significant revenues in the third quarter and that it is in negotiations with a strategic partner for the Taribani field.

Since January, oil sales generated average monthly revenues of US$760,000, which is set to increase to US$1.2 million per month with the start of gas sales in the third quarter.

The company expects the planned four well drilling programme on Taribani to add 1,900 barrels of oil per day (bopd) to its production, which translates into revenues of US$5.7 million per month at the current oil price.

Meanwhile, work on the Mtsare Khevi Gas Complex has led to an increase in the area’s estimated gas potential to 1.2 trillion cubic feet (tcf) from 0.5 tcf previously.

In addition Frontera said that it will try not to draw down on its US$35 million standby equity distribution agreement (SEDA) given the downward pressure on our stock price and rely on alternative funding sources including strategic partnerships.

Shares in sector peers Chariot and Matra Petroleum (LON:MTA) also were in demand this morning with the two companies rallying 8.5 percent to 78.25 pence and four percent to 2.7 pence in morning trade respectively.

Chariot has secured the Ocean Rig Poseidon drill ship to drill the Kabeljou well on the Nimrod prospect offshore Namibia.

The Poseidon is anticipated to arrive on location in July this year and the drilling operations will begin shortly thereafter with the well expected to take two months to drill.

This is the second well to be drilled in Chariot's four to five exploration well programme in Namibia.

The Nimrod prospect is located in the Orange Basin in Southern Block 2714A, where Chariot has a 25 percent interest.

Peer Matra got a boost from the appointment of former deputy CEO of Russian major TNK-BP Maxim Barskiy as its new chief executive, lifting its share price up four percent to 2.7 pence in morning trade.

Barskiy has been on board since April when he bought 575 million new shares in the company at 0.8 pence per share worth £4.6 million, giving him a 29.8 percent stake.

Matra said his involvement was expected to ‘significantly enhance’ the new venture opportunities available to Matra including potential acquisition opportunities in Russia in the short term and potential expansion internationally in the medium term.

Since Barskiy’s appointment to the board, Matra’s share price more than doubled from 1.1 pence per share.

Speaking of share price movements, while the three oil groups did very well, Pursuit Dynamics (LON:PDX) was the heaviest faller in London  markets, seeing three quarters of its value wiped out after announced that its full year revenues will be materially below forecasts.

This comes after consumer goods giant Procter & Gamble decided against a technology tie-up with PDX, prompting it to speed up a strategic review.

The two companies were in discussions over an exclusive licensing agreement for Pursuit’s technologies to improve industrial production processes.

“We are obviously extremely disappointed with the decision by P&G.  Although the resulting revenue shortfall will constrain growth we will continue to pursue a range of commercialisation opportunities while we conduct the strategic review,” said PDX interim CEO Jeremy Pelczer.

Moving to Torotrak, the maker of transmission systems announced a cooperation and licence deal with Univance Corporation, a Japan based manufacturer of passenger and industrial vehicle transmission units and other automotive parts.

The agreement enables Univance to make and supply core variator components and variator assemblies to Torotrak licensees.

Torotrak will provide its engineering support and intellectual property in return for a revenue share on all sales of Torotrak related parts or sub assemblies.

The two companies have been working on a shared cost basis over the last two years to develop production processes for the manufacture of discs and rollers.

“Engaging a component manufacturer of Univance's calibre and market reach is a significant step for Torotrak in our strategy to bring our technology to market,” said chief executive of Tototrak Dick Elsy.

“Ensuring a high quality and reliable production source for our key parts, discs and rollers, is essential to building confidence in our technology.”

In the meantime, food company Cranswick (LON:CWK) and support services group MITIE Group (LON:MTO) were among the most followed stocks in the FTSE 250 after both reported higher full year revenues and pre-tax profits.

The figures form Cranswick showed an eight percent increase in revenues to £821 million for the year to end March following a “strong recover in the second half from first half challenges”.

Pre-tax profits reached £48.4 million, up three percent from a year earlier, and earnings per share increased to 72.8 pence from 72.8 pence.

The group added that underlying sales were up 10 percent, reflecting growth across most product sectors.

“Against a background of strong raw material price increases early in the financial year and a continued challenging environment for the consumer, the company recovered strongly during the second half and recorded its highest ever sales and second best trading profit in its history,” said chairman of Cranswick Martin Davey.

The report from MITIE, which also covered the year to end March, revealed an 8.9 percent increase in pre-tax profits to £94.5 million on revenues of £2 billion, up 5.9 percent from the previous year.

MITIE said its organic order book has increased 26 percent to £8.6 billion from a year earlier, while the pipeline of potential bid activity stands at £11.2 billion and the group has already secured 83 percent of the revenue budgeted for 2012/13.

“We have made excellent progress on all of our key strategic objectives, achieved sector-leading organic growth and been awarded a number of significant contracts that are enhancing our business,” said MITIE chief executive Ruby McGregor-Smith.

“Financially robust, we have a clear strategy for the development of our business, supported by a buoyant sales pipeline and an order book that stands at record levels.”

This morning, gold miners Ariana Resources (LON:AAU), ECR Minerals (LON:ECR) and Stratex International (LON:STI) had positive new to report to investors including bonanza grades from Ariana’s Red Rabbit gold project in Turkey.

The result from the Kiziltepe sector of Red Rabbit included the highest grades ever recorded from the deposit.

The grades included 13.1 grammes per tonne gold over 12.1 metres and 187,6 g/t silver including an interval of 3.2 metres grading 38.7 g/t gold and 511 g/t silver and one metre at 65.9 g/t gold and 760 g/t silver.

Exploration drilling has also determined that the Arzu North vein system extends to the southeast beneath cover.

These new results highlight significant potential within the "gap zone" – and the company is now planning a follow-up deeper drilling programme.

“The scale of the project continues to grow with further zones being identified that will only improve the economics of the project which we are advancing towards production,” said managing director of Ariana Kerim Sener.

“The fact that these results derive from an area of cover along a strong geophysical anomaly corridor suggests that there is significant potential in this zone.”

The result presented by ECR confirmed the presence at depth of high grade gold mineralisation within quartz veining over a 500 metre strike length at its El Abra prospect within the Sierra de las Minas gold project in Argentina.

The company added that the mineralisation remains open along strike and down dip.

“Further drilling is merited at El Abra in order to better define the mineralisation encountered and, dependent on the success of such drilling, to obtain sufficient data to complete an initial resource estimate,” said managing director of ECR Patrick Harford.

The “promising” results reported today included intersections of 3.9 metres grading 11.6 g/t gold, three metres at 11.1 g/t gold and one metre at 20.5 g/t gold.

Peer Stratex said the results from its on-going channel-chip sampling on the Pandora epithermal gold vein in Djibouti were “extremely encouraging”.

The highlights included intersections of 1.9 metres at 20.35 g/t gold, three metres at 11.66 g/t gold, 2.6 metres at 11.91 g/t gold and 13.9 metres at 5.35 g/t gold.

“The continuity of multi-gram gold grades now exists over more than 1,000 meters of strike, together with well-defined high-grade portions within the structure,” said executive director for East Africa David Hall.

The next key milestone is to commence drilling before the end of the year, and investigate the potential for continuity of these grades at depth.

Fellow precious metals focused group Vatukoula Gold Mines (LON:VGM) told investors that cash generation from operations jumped 57 percent to £4.38 million during the six month period to end February, during which it defined an inferred resource of 142,000 ounces of gold.

The company has discovered a new high mineralised system during exploration drilling, the most significant intersection from which was 124.7 g/t gold over 0.46 metres.

Revenues during the period reached £30.4 million, up 21 percent from a year earlier, while gold productio0n was flat at around 30,000 ounces.

“Our focus remains on building towards long-term cost effective sustainable gold production, at a target level of 100,000 ounce gold per annum, and we are pleased with the steady progress we have made toward that goal in the six months under review,” said chief executive of Vatukoula David Paxton.

Elsewhere in the mining sector, chairman of Metals Exploration (LON:MTL) I R Holzberger said he was pleased with the progress made by the company last year.

The full year report highlighted the approval of the Declaration of Mining Project Feasibility (DMPF) for the Runruno gold-molybdenum project in the Philippines by the Department of Environment and Natural Resources.

This has enabled FCF Minerals Corporation to move into the design, development and construction phase of Runruno.

New World Oil & Gas (LON:NEW) also released its full year report this morning, calling 2011 a year of “outstanding progress” at both an operational and a corporate level.

The said it has exceeded objectives set out in its AIM admission document by progressing two oil and gas projects within two months of listing and completing a third in proven hydrocarbon regions.

The company’s Blue Creek project in Belize currently has unrisked prospective resource of 294 million barrels of oil with an estimated net present value of US$7.1 billion.

New World also has two projects in Denmark, one of which has recoverable resources of 1.4 trillion cubic feet of gas.

“All of the investments made during the year satisfied these criteria and we are very pleased with our progress over the period,” said chairman of New World William Kelleher.

“We feel that the potential of Blue Creek may be significant, in that it lies in close proximity to and displays structural similarity to the recently discovered and producing Spanish Lookout and Never Delay fields.”

Other news in the oil and gas sector included an operational update from Trinidad from Leni Gas & Oil (LON:LGO) and an update from Red Emperor Resources, which has decided to participate in the Shabeel North well in Puntland, Somalia.

The Shabeel North well is set to spud in the first week of June and will follow the Shabeel-1 well.

The company made the decision was made after reviewing final logs from Shabeel-1.

As a result, Red Emperor will maintain its 20 percent stake in the in each of the Dharoor Valley and Nugaal Valley production sharing agreements.

In the meantime, LGO has mobilised a workover rig to start field operations on the re-development of the onshore Goudron Field in Trinidad.

The company has previously said that it plans to re-develop the Goudron oilfield in partnership with state owned company Petrotrin.

Re-development will start with the working over of up to 50 existing wells and will be followed by the drilling of additional wells.

The field currently has a proved and probable (2P reserves) estimate of eight million barrels including 1.9 million barrels in the proved category.

“We are confident that with an increased level of investment and the application of new technologies we will be able to raise production substantially, which will contribute directly to the Ministry of Energy's immediate objectives of increasing oil production in Trinidad,” said chief executive of LGO Neil Ritson.

Away from mining and oil and gas, ReNeuron (LON:RENE) announced that chief executive Michael Hunt will present to the World Stem Cells & Regenerative Medicine Conference in London today.

Hunt will provide a summary of the company’s stem cell technologies and its ReN001 stem cell therapy targeting stroke disability. 

The group also noted that Osiris Therapeutics’ stem cell treatment for graft versus host disease, Prochymal, gained marketing approval in Canada last week, marking the world's first marketing authorisation for a manufactured stem cell drug.

“We believe that this is a defining moment, opening up the therapeutic paradigm of stem cell treatments of this kind,” said Hunt.

“Our own stem cell treatments are also off-the-shelf in nature, so it is particularly reassuring to see that this completely new approach to medicine is being increasingly endorsed by regulatory authorities around the globe.”

Financial bookmakers are expecting a flat start in London markets today. The FTSE 100 is set to open at 5,265, down only three points from Friday’s close.

The meeting of the Group of 8 that took place over the weekend fell short of calming jittery investors. G8 leaders said they wanted Greece to stay in the euro zone and that Europe has to find a balance between austerity and stimulus.

However, German Chancellor Angela Merkel insisted that Greece and other debt laden countries should reduce budget spending to resolve their fiscal problems.

Traders are now looking to the next EU summit, which will kick off on May 23.

“The G8 summit over the weekend failed to provide any guidance for investors, with those in attendance simply repeating well used comments about keeping the Eurozone intact and ensuring Greece doesn’t fall off a cliff,” said analyst at forex.com Chris Tedder.

“It now appears the countries in attendance are renewing calls for the larger and healthier Eurozone nations, like Germany, to assist their struggling neighbour countries, which comes at a time when debt markets appear to be questioning the health of Italy and Spain.”

Asian markets were in buying mode today. Japan’s Nikkei 225 index climbed 17 points (0.2 percent) to 8,628 and China’s Shanghai Composite Index tacked on 14.5 points (0.6 percent) to reach 2,359.

Despite a surge in the US dollar, gold managed to post a weekly gain of over US$10 per barrel thanks to support from speculation that the Federal Reserve is considering introducing further stimulus to support the economic recovery in the US.

Minutes from the latest meeting of the Federal Open Market Committee (FOMC) released this week showed that several policymakers said they would be in favour of further stimulus if the recovery lost momentum.

More stimulus from the Fed would weaken the US dollar and lift demand for gold, which is seen as an inflation hedge and an alternative investment to the greenback.

In other news, the World Gold Council said gold demand from China surged 10 percent to a record 255.2 tonnes in the first quarter.

The WGC added that China will soon become the world’s biggest consumer of the yellow metal.

Meanwhile, demand from the current largest buyer of gold India slipped 29 percent to 207.6 tonnes year on year during the quarter.

Gold ended the week at US$1,592/oz, up US$12 from a week earlier. Silver fell to US$28.72/oz from US$28.89/oz and platinum declined to US$1,451/oz from US$1,461/oz.

Randgold Resources (LON:RRS) rose to 4,894 pence 4,851 pence over the past five days of trading, while fellow FTSE 100 constituent, silver miner Fresnillo (LON:FRES), dropped to 1,358 pence from 1,417 pence.

In the FTSE 250, platinum miner Lonmin (LON:LMI) slipped to 778 pence from 900.5 pence and gold producer African Barrick Gold (LON:ABG) declined to 338.3 pence from 348.9 pence.

Oil prices fell sharply this week with the West Texas Intermediate (WTI) benchmark and Brent crude shedding over US$4 per barrel under pressure from the political turmoil in Greece and rising inventories in the US.

Early in the week, emergency coalition talks between five parties called by president Karolos Populias failed to result in an agreement and the debt-laden country will hold a new election on June 17.

There are concerns that anti-austerity parties could secure enough votes in the next election to form a government and renounce the country’s commitments under the bailout deal, which could force it out of the euro zone.

Late in the week, Moody’s slashed its ratings on 16 Spanish banks including major Santander, while Fitch reduced Greece’s credit rating to CCC from B-minus.

Fitch also warned that it could downgrade all euro zone members if Greece exits the monetary union.

In other news, GoldmanSachs now expects the Chinese economy to expand 8.1 this year compared with 8.6 percent previous, while the forecast for the current quarter was reduced to 7.9 from 8.5 percent.

China is currently the world's second largest consumer of oil behind the US.

Speaking of the US, the Department of Energy reported this week that America’s crude stocks added 2.1 million barrels last week to reach 381.6 million barrels, which is the highest level in more than two decades.

Demand for oil futures was also hit by comments from Saudi oil minister Ali al-Naimi.

He said last weekend that oil supply in the global market currently outstrips demand by between 1.3 and 1.5 million barrels per day and that demand would increase in the second half of the year.

According to the minister, Saudi Arabia wants oil prices to fall to US$100 per barrel.

The kingdom, which is currently the world’s largest exporter of crude oil, increased its output by 0.2 million barrels to 10.1 million barrels per day in April, the highest level in three decades.

US light, sweet crude for June delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), ended the week at US$91.48/oz.

July Brent crude closed at US$107.14/barrel on the ICE Exchange on Friday.

BP (LON:BP.) dropped to 391.5 pence from 415.5 pence over the past five days of trading and fellow supermajor Royal Dutch Shell (LON:RDSB) declined to 2,044 pence from 2,132 pence.

Tullow Oil (LON:TLW) pulled back to 1,336pence from 1,463 pence, while BG Group (LON:BG.) fell to 1,245 from 1,336.5 pence a week ago.

On Friday, interdealer broker ICAP (LON:IAP) confirmed it is acquiring PLUS Stock Exchange, the smaller company equity exchange, for £1 in cash subject to PLUS Markets Group (LON:PMK) shareholder consent and approvals from the Financial Services Authority.

Early in the week, PLUS said it was to wind-down and close after failing to find a buyer or new funding.

PLUS is one of only five RIEs (Recognised Investment Exchange) in the UK. 

It provides listing and quoting services to around 140 companies and generates revenue of approximately £3 million a year. The business is presently loss making.

PMK had announced earlier this week it was to wind down and close after it failed to find a buyer or new funding.

In a statement, ICAP said it operates regulated platforms running the world's largest electronic trading platforms and also operates 10 multilateral trading facilities.

In addition, ICAP already acts as a broker in exchange products and is a full member of the world's largest exchanges.

Other new sin the top flight included security services group G4S (LON:GFS) expects to achieve further growth this year after seeing revenues climb 7.5 percent in the March quarter.

Excluding the impact of the contract to provide security at the upcoming Olympic and Paralympic Games in London, revenues were up six percent from a year earlier.

At the secure solutions business, which accounts for the bulk of group sales, organic revenue growth reached seven percent including a strong performance in the UK, which got a boost from the £200 million Olympic Games deal.

The cash services division achieved revenue growth of four percent including a ten percent jump in developing markets revenues.

In the banking sector, HSBC (LON:HSBA) is on track to meet targets for its 3-year turnaround plan, it announced at its group strategy investor day.

It revealed it made US$2 billion in cost savings after the first year of the programme through radical restructuring.

The company plans to save US$3.5 billion by the end of 2013.

Europe’s biggest bank says it will focus on the regions with the best growth prospects, which will in turn make the company easier to manage and control.

“We will continue to simplify HSBC, enabling us to integrate systems and operate to high global standards internationally,” said chief executive Stuart Gulliver.

“We will continue to run off our legacy assets, including the U.S. consumer and mortgage lending book.”

UBS this week issued a note on sector peer Barclays (LON:BARC), whose share price has suffered in recent weeks due to concerns over its exposure to Spain.

Since it reported first quarter results last month, the share price has plunged around 20 per cent, which the broker says makes it an attractive investment.

As a result, it is upgrading its recommendation to ‘buy’ from ‘neutral’.

However, UBS has also cut its target price for UK bank to 215 pence from 272 pence.

UBS analyst John-Paul Crutchley said: “Recent share price retrenchment has largely been driven by concerns over Barclays exposure to Spain where we think a more realistic approach to impairment over the last few years should limit the impact of higher provisioning from the proposed Royal Decree to between £50-£70m.”

In oil and gas, Tullow Oil (LON:TLW) this week confirmed that a drill ship has been contracted to begin work next month on further exploration of the Zaedyus discovery in French Guiana.

It follows the drill success late last year. The plan initially is to appraise the Zaedyus-1 well and explore for deeper objectives. This will be followed by an exploration wildcat well.

“Planning is also ongoing to acquire two large 3D seismic surveys,” Tullow added in a statement this week. 

Shell (LON:RDSB) with a 45 per cent stake in Zaedyus is taking operatorship of the breakthrough discovery, which is a facsimile of the producing Jubilee field off the coast of Ghana.

Tullow is the next biggest shareholder with 27.5 per cent and Total has 25 per cent.

Meanwhile, mining group Antofagasta (LON:ANTO) released its quarterly results.

The mining giant revenues in the first three month of the year reached US$1.76 billion, up from US$1.27 billion a year earlier with the increase reflecting higher copper and gold volumes and prices.

The volume of copper produced during the quarter was 162,900 tonnes, a 25.5% increase on the 129,800 tonnes produced in the March quarter of 2011.

Sector peer Vedanta released its full year results this week, which showed that revenues in the year to end March jumped 23 percent from the previous year to US$14 billion.

However, earnings per share dipped 46 percent to US$1.42 due to lower attributable profit from subsidiaries.

“This has been a transformational year for the group, in which we completed the Cairn India acquisition, announced the consolidation of the group, and delivered strong production growth,” said chairman of Vedanta Anil Agarwal.

After taking into account revenue from acquisitions in 2011 and 2012 including the Moody International acquisition, and a slight positive currency effect, total reported revenue surged 40 percent.

The group added that it has had a positive start to the year with the high single digit organic revenue growth being driven by the four largest divisions.

“We expect our performance this year to be in line with our expectations although we remain alert to any potential rapid change in market conditions which could impact our growth,” said chief executive of Intertek Wolfhart Hauser.

Precious metals miner Polymetal International (LON:POLY) has sold Amikan Holding Limited, which owns the Veduga gold deposit in the Krasnoyarsk region of Russia, to Polygon Gold.

In return for the asset, Polymetal has received US$20 million in cash and 750 shares in Polygon, giving the group an 81.8 percent stake.

Polymetal said it planned to provide certain technical and regulatory assistance to Polygon and may dilute its stake if “external financing is raised”.

Veduga has an open pit reserve estimate – which is compliant with the NI43-101 standard – of 1.05 million ounces of gold at a grade of 5.5 grammes per tonne (g/t).

“We believe this transaction allows Polymetal, through its more than 80 percent stake in Polygon, to benefit from the development of this high-quality asset while preserving management's focus on the company's existing project pipeline,” said chief executive of Polymetal Vitaly Nesis.

Russian steelmaker Evraz (LON:EVR) released an interim management statement this week.

The group told investors that its total steel product sales in the first quarter reached 3.9 million tonnes and revenues were in line with the same period of 2011 as prices were broadly flat.

The group had US$453 million in the bank at the end of March, down from US$801 million at the end of 2011, mainly due to an increase in working capital, which will be revised by the end of the second quarter.

Serco Group (LON:SRP) also updated investors on its performance.

The government services group said its full year guidance remains unchanged and that improving conditions around the globe, if they continue, could lift its organic revenue growth in 2013 as well as result in further improvement into the medium term.

“This would support the continued delivery of strong financial performance by Serco,” the group told investors in the report.