US figures stoke hope in London

The FTSE 100 Index closed up 57.1 points at 5271.8.

Hopes of an economic recovery lifted banking, oil and mining companies while positive economic data from the United States also helped sentiment.

Diageo rose 27½p to 918p as Merrill's set a range of between £10.50 and 950p and retained a strong buy rating.

Hopes of an improving economy saw BP climb 12½p to 625p, while Shell rose 8p to 523p and Anglo American unearthed a 19p gain to 996p.

Other mining stocks on the way up included BHP Billiton, up 5¾p at 400¼p and Rio Tinto 23p ahead at £13.88.

Among the banks, Lloyds TSB rose 9p to 721p, Barclays surged 35p to £21.70, and Royal Bank of Scotland moved 28p higher at £18.08.

The market's second biggest stock, GlaxoSmithKline, rose 31p to £16.54 and the fifth largest, AstraZeneca, was up 61p to £34.87.

Investors were also tuning into BSkyB after rival ITV Digital's fall into administration yesterday.

The satellite broadcaster was up 17½p at 832p as speculation circled about ITV Digital's future size and shape.

As the stand-off with the Football League continued, co-owners Granada and Carlton fell back, with Granada easing 5½p to 137p and FTSE 250 partner Carlton down half a penny at 271½p.

FTSE 250 stock Manchester United also eased 1¾p to 123p as analysts viewed ITV Digital's demise as a negative factor for when the renegotiation of Premiership television rights comes round.

In other corporate news, Claims Direct lost 20% of its value after warning of wider losses as it launched its new business model. Shares fell 2¼p to 9¼p following the update.

Signature Restaurants served up more pain for investors by warning it may not see a pick up in its central London market this year.

The former Belgo group, which reported a fall in interim operating profits, is also closing two more sites, and its shares slipped 2%, or ¾p to 37¾p.

But regional brewer Wolverhampton & Dudley was up 12½p at 680p after posting an upbeat trading statement ahead of its first half results.

Moss Bros also surged 19% after it emerged that fashion entrepreneur Shami Ahmed was prepared to raise his offer for the struggling menswear chain to at least 45p a share - up from the previous 40p. The company closed at its highest point since last July following a rise of 7p at 43p.