THE FTSE 100 Index was up 7.7 points at 5773.5 after a rally in banking shares helped counter ongoing worries over the eurozone debt crisis.

At one stage it was up 26 points after a strong opening on the US market, which was led higher after a flurry of corporate deals, including news that Timberland had agreed to a $2bn (£1.23bn) takeover by outdoor clothing group VF Corporation.

Sentiment in London was helped by a report that Lloyds Banking Group intends to cut £1bn, and 15,000 jobs, from its cost base, helping its shares rise by 0.6p, or one per cent, to 47.6p. Another bank gainer was Barclays, after it agreed to settle all complaints over payment protection insurance without quibble as long as they had been submitted by April 20.

The bank has set aside £1bn for possible compensation payouts, which helped the shares add 3.9p to 260.4p.

Other risers included the two Kazakhstan-based miners, Eurasian Natural Resources (ENRC) and Kazakhmys, after weekend reports that Glencore is considering an offer for ENRC. Analysts suggest ENRC would be a good fit for the recently-floated Glencore. Shares in ENRC rose by 34.5p, or five per cent to 776.5p, while Kazakhmys was up 26p to 1235p.

An upgrade and positive comment by broker Investec helped pump maker and engineer Weir add 2p to 2031p. Imperial Tobacco was among the fallers after a warning that profits are suffering in Spain and it is slashing prices to retain its market position. That sent the Lambert and Butler maker’s shares down 29p at 2056p.

The heaviest faller was mobile power generators group Aggreko after APR, the number two company in the sector, agreed a takeover by Horizon, the cash shell run by former Pizza Express and Pearl Insurance backer Hugh Osmond.

Amid fears the deal could result in stiffer competition, Aggreko shares were more than three per cent lower, off 61p at 1874p.

P&O and Princess Cruises group Carnival also went into reverse, dropping 45p to 2254p, on a warning it had underestimated the full impact on demand of conflicts in the Middle East and North Africa and the earthquake and subsequent nuclear crisis in Japan.

On the AIM market, Majestic Wine shares dropped 20.3p to 450p.