Optimism powers the Footsie

Signs of improved trading conditions, particularly in the telecoms sector, helped the FTSE 100 Index move ahead 48.6 points to 5174.1 by the close.

Progress was also helped by Shell, which surged 17½p to 498p after surprising the City with better-than-expected results.

Banks continued the sector's strong run, with Barclays up 18p at 613p, Royal Bank of Scotland ahead 55p at £20.08 and Abbey National up 19p at £10.96.

Elsewhere, under pressure tech and telecom stocks showed signs of bouncing back from recent woes.

FTSE 250 Colt reported a better-than-expected performance lifted shares by 42%, or 14p, to 47p. MmO2 surged 3p at 47½p - a 7% rise - although Vodafone fell back from earlier gains to ease ¼p at 108½p.

Among the techs, ARM added 2½p at 225½p and Logica was ahead more than 3%, or 11p stronger at 326p.

Other FTSE 250 telecoms companies on the up included Kingston ahead 6½p at 84½p while Marconi gained 0.30p or 2% to 12.55p.

Rival Spirent leapt 14½p at 113p after telling shareholders at its annual general meeting that first-quarter trading was in line with expectations.

But Telewest sank 0.35p at 10.15p - a 3% dive - after announcing plans to cut 1,500 jobs.

Back in the Footsie, Shire Pharmaceuticals leapt 44p to 624p as the drugs group continued its strong run from yesterday, when it issued strong results and provided an upbeat outlook.

Imperial Tobacco cheered investors with interim figures, which showed strong performances in the UK and overseas had boosted profits, and the shares put on 52p at £10.29.

Rival Gallaher added 23p at 609p while British American Tobacco - which earlier this week blamed the tough economic climate for a 6% slump in volumes - gained 6p at 725p.