London close: Banks provide a boost after summit

The EU summit has of course dominated markets today and investors have taken the news reasonably well, with benchmark indices across Europe finishing between 2-3% higher after Eurozone nations (and some others) reached an agreement on enhancing fiscal discipline and strengthening economic policy coordination in the single-currency bloc. The FTSE 100 in London, however, rose by a lesser 0.83% as some raised concerns over David Cameron's choice to veto an EU treaty change.SUMMIT IN FOCUS26 out of the 27 EU member states agreed on a "fiscal compact", while Britain had opted out, meaning that the agreement will be limited to an intergovernmental deal. Accelerating the entry of the European Stability Mechanism (ESM) and the commitment to provide additional resources to the IMF of up to €200bn were among the measures agreed by nations.Britain blocked an agreement on a tax and budget pact that would apply to all members of the EU because it could not win concessions protecting the revenues of the City of London. David Cameron faced huge political pressure from his own Conservative Party not to agree treaty change without either a referendum or regaining powers for the UK Parliament. He said that it was a tough decision but it was based on his country's best interests."For markets though what is critical is that the 17 Eurozone countries have all signed on to the new agreement," said market analyst Colin Cieszynski from CMC Markets, as he sticks up for the British Prime Minister. "In fact, the real question is why any non-Eurozone countries in their right minds would bother to sign on to EU oversight of their budgets unless they plan to join the Euro someday."Of course the UK and others didn't sign on to the budget rules. Why would they? The countries that have their own currencies are judged daily in the markets on their own financial merits. They weren't part of the problems that were undermining the euro," he said.Meanwhile, market chatter regarding the creation of a new Chinese investment vehicle and falling Chinese inflation also gave markets an extra boost today. Some observers are speculating that the country will turn out to be some sort of 'white knight' for Europe in its crisis. BANKS JUMP AFTER SUMMITThe banks were the best performing stocks on Friday afternoon, in line with the broader European banking sector, on the back of the treaty changes agreed at the EU summit, albeit not by all member states. Sentiment was lifted by the agreement to add €200bn to the bail-out funds designed to support distressed European countries, while in a separate move the EU (except for Britain) agreed to reduce the impact for the private sector iof future bail outs - this is essentially a fillip for European banks with heavy exposures to Southern Europe. Lloyds rose 6.7%, Barclays finished 5.7% higher while the Royal Bank of Scotland gained 5.4%.Miners were also on the up, with Antofagasta, ENRC, Kazakhmys, Fresnillo and Xstrata making solid gains.IMI fell as Credit Suisse cut its rating to underperform after the broker highlighted the stock, which trades heavily in Europe, as being at risk from the ongoing economic turmoil. QinetiQ Group was a high riser on the FTSE 250 following news that its North American division was awarded a new task order by the Marine Corps Systems Command to provide logistics and inventory support to the Global Combat Support Systems. ECONOMIC NEWSMeanwhile, the UK trade deficit narrowed sharply in October, as the goods sector helped drive the value of exports to new highs. The UK's trade in goods and services was £1.6bn in deficit in October compared with a deficit of £4.3bn in September, according to the Office for National Statistics. The price of goods leaving UK factories eased in November, according to figures from the Office for National Statistics. The output price index for home sales of manufactured products rose 5.4% in November, compared with a rise of 5.7% last month. BCFTSE 100 - RisersLloyds Banking Group (LLOY) 26.71p +6.52%Barclays (BARC) 190.20p +5.43%Royal Bank of Scotland Group (RBS) 21.99p +5.11%Antofagasta (ANTO) 1,228.00p +3.02%Prudential (PRU) 654.50p +2.91%Eurasian Natural Resources Corp. (ENRC) 685.00p +2.85%Kazakhmys (KAZ) 943.00p +2.56%InterContinental Hotels Group (IHG) 1,117.00p +2.48%Fresnillo (FRES) 1,769.00p +2.31%Aviva (AV.) 321.30p +2.26%FTSE 100 - FallersEssar Energy (ESSR) 222.90p -1.42%Weir Group (WEIR) 1,965.00p -1.40%GlaxoSmithKline (GSK) 1,424.00p -1.11%Aggreko (AGK) 1,853.00p -1.07%Shire Plc (SHP) 2,131.00p -0.84%IMI (IMI) 731.00p -0.81%Diageo (DGE) 1,360.00p -0.80%Imperial Tobacco Group (IMT) 2,351.00p -0.76%National Grid (NG.) 605.50p -0.74%SABMiller (SAB) 2,184.00p -0.73%FTSE 250 - RisersAnglo Pacific Group (APF) 282.30p +5.14%QinetiQ Group (QQ.) 137.40p +4.81%Mothercare (MTC) 160.60p +4.35%Balfour Beatty (BBY) 251.90p +4.09%Daily Mail and General Trust (DMGT) 402.20p +3.61%Cable & Wireless Worldwide (CW.) 17.37p +3.52%Laird (LRD) 144.50p +3.44%UBM (UBM) 488.10p +3.35%Home Retail Group (HOME) 88.80p +3.32%Barratt Developments (BDEV) 96.70p +2.93%FTSE 250 - FallersDomino Printing Sciences (DNO) 492.40p -6.48%International Personal Finance (IPF) 204.10p -5.90%Allied Gold Mining (ALD) 166.50p -5.88%Carpetright (CPR) 418.50p -5.74%Gem Diamonds Ltd. (DI) (GEMD) 180.30p -5.25%Ocado Group (OCDO) 84.25p -4.26%Galliford Try (GFRD) 457.50p -3.93%Cape (CIU) 331.40p -3.86%Yule Catto & Co (YULC) 170.00p -3.30%Supergroup (SGP) 501.00p -3.09%