FTSE spikes 150 points after US bounce

The FTSE 100 has opened 3% higher after the Dow Jones added 250 points overnight on better retail data and news of a Greek bank merger.

In London, the FTSE rose by 150 points to 5,281 in early trading, as investors reacted to the jump in US markets seen on Monday. The index is currently trading up 2.5% at 5,258.

The Dow rose by 255 points in Monday's trading to close 2.3% higher at 11,539, with the S&P 500 up 2.8% to 1,210 and the Nasdaq rising 3.3% to 2,562 as US consumer spending figures came in higher than expected and two Greek banks announced merger proposals.

News of a proposed merger between Greece's second and third largest banks, EFG Eurobank and Alpha Bank, improved sentiment on the sector and helped push financials higher in the US and Asia.

The bounce was less evident in Asia but markets still traded higher, Japan's Nikkei up 1.2% to 8.954 and Hong Kong's Hang Seng up 1.4% to 2,792.

US treasury yields rose to 2.24%, with gold stabilising at $1,790 after last week's fall.

The reaction was also more muted in Europe: France's CAC 40 was up 0.7% to 3,175 in early trading today, with Germany's DAX up 0.4% to 5,693.