Markets recover as leaders seek eurozone solution

The FTSE has opened trading in positive territory amid signs European policy makers are moving to stem the eurozone debt crisis.

Shortly after opening, London's leading shares had advanced 0.8%, or 43 points, to 5270 as banking stocks emerged the early winners.

Barclays and part-nationalised banks Royal Bank of Scotland and Lloyds are both up around 3%, with Kingfisher and oil giant BP completing the morning's winners.

Banking stocks have rallied after European Commission president Jose Manuel Barroso said the commission is set to launch euro bonds in a sign politicians are looking to tackle the ongoing crisis engulfing the region.

London's gains are mirrored throughout Europe, with Germany's Dax advancing nearly 1% and France's Cac 40 up 0.5%.

The buoyant mood in Europe follows a bounce in Asia, with Japan's Nikkei closing 1.8% higher, Hong Kong's Hang Seng Index gaining 0.4% and the South Korean Kospi Index also ticking up 0.4%. Meanwhile, in the US the Dow closed up 1.27% at 11246.