LONDON FTSE 100 CLOSE 5,466.36 +62.98

STRENGTH in commodity and banking stocks yesterday pulled the FTSE 100 index to a ten-week closing high.

The Footsie closed up almost 63 points, or 1.2 per cent, at 5,466.36, finishing above the 5,450-mark for the first time since 3 August. The index has gained 3 per cent over the week and has bounced some 10.5 per cent since hitting a low below 5,000 on 4 October.

But Mic Mills, head of trading at ETX Capital, warned: “It’s a good end to a positive week, but the FTSE will have to show it can hold above these levels for quite a while before it can kick on.

“And, given low trading volume still, there really does not seem anything underlying this rally to keep it up.”

A vote in the Slovakian parliament to raise the size and power of the eurozone bailout fund came after the London market had closed on Thursday, when shares had fallen 0.7 per cent.

Confidence returned yesterday amid hopes that G20 finance ministers will make progress with a plan to tackle the mounting crisis, including details of recapitalising banks.

The mood was boosted further by figures showing US consumers spent more than expected last month and reports that nations from China to Brazil are considering increasing the International Monetary Fund’s lending resources to help stem the eurozone debt crisis.

The pound was down against the euro at €1.14 as the single currency strengthened on the optimism over this weekend’s G20 meeting. Sterling was up against a weaker dollar at $1.58.

Bank shares were initially lower after Standard & Poor’s cut Spain’s long-term credit rating by one notch, a day after Fitch lowered its view of the credit worthiness of four European banks, including Lloyds Banking Group and Royal Bank of Scotland, to reflect weakening support from the Treasury. However, RBS’s shares improved 0.1p to 24.3p and Barclays added 2.9p to 176.1p. Lloyds proved the exception as shares remained 1p lower at 33.3p.

Others on the front foot included consumer goods firm Unilever after it unveiled a deal to buy Russian beauty products company Concern Kalina. The deal for 82 per cent of the business values Concern at around €500 million (£437m). Unilever shares were 52p higher at 2,109p.

There was also a rise of 5 per cent or 7.6p for asset manager Man Group, although – at 157.6p – its shares are still a long way short of the level seen prior to its warning last month that it had lost business during August’s market turmoil.

Shares in online retailer Asos were lower after it reported UK sales figures below market expectations. Shares fell 9 per cent at one stage but they were later just 26p lower at 1,480p.

There was also an impact on high street retailer Next, which has a sizeable home shopping business and saw its shares dip 1p to 2,610p in the FTSE 100 index.

Among the Scottish stocks, Edinburgh-based explorer Bow-leven soared 60.5 per cent or 45.5p to 120.75p – making it the highest riser on the Alternative Investment Market – after striking more oil off the coast of Cameroon, in west Africa. The stock is still a long way off its 52-week high of 398p following poor sessions in July and August.