In the mid-session the UK’s leading index is trading at 5234 at 11am (London time), up 16 points from yesterday’s close.

Initially the FTSE 100 opened 40 points higher than the previous day’s close as the index gained momentum from positive overnight trading activity in the US and Asia. We are now in the seventh consecutive day of an equities rally, with Wall Street almost reaching a four-week high yesterday. This represents a change in stock market behaviour – while the markets are still volatile, they are far more stable compared to a few weeks ago when any rumblings from the eurozone caused traders to hit the sell button.

This robustness comes on top of news that the euro has broken its two-day rally against the dollar, with the euro falling 0.4% against the dollar this morning. However, the eurozone can take some comfort from an unlikely source: in a surprise deal, China and Greece have announced a multimillion euro deal that will increase cooperation across a number of industries, including logistics, tourism and telecommunications. China’s vice premier Zhang Dejiang commented that he was ‘convinced that Greece can overcome its current economic difficulties’.The deal comes just hours after Moody’s downgraded Greece’s credit rating to ‘junk’. It is hoped that the deal can limit any negative effects from the downgrade and provide some further stabilisation for the eurozone.

Focussing on UK markets, Royal Bank of Scotland currently leads the charge, with the bank receiving a lift after selling its Pakistan business for £34 million to Faysel Bank Limited. The bank is now up to 45p a share (+2.67%). Other winners include Cairn Energy, which benefited from an approval to start drilling in Greenland, boosting its share price by 1.34% to 431.6p.

Sainsbury’s also managed a slight gain this morning (+0.71%). The heavyweight grocer reported its smallest quarterly rise for five years, with the return to a VAT rate of 17.5% and higher fuel costs being blamed for the lacklustre increase. Adding to the negative sentiment were words from chief executive Justin King, commenting that the planned government spending cuts in next week’s budget will place the consumer’s budget under strain – bad news for any retailer. The supermarket stands at 326p a share.

All eyes are now on the US to see if the global equities rally can continue when Wall Street opens for trading.