FTSE at three-month high

Hopes that the worst of the global slowdown could be over helped London's blue-chips climb to their highest point for nearly three months today.

The FTSE 100 Index added a further 1.3% to its 2% gains on Wednesday, closing 54.1 points higher at 4243.7 with bank shares leading the charge.

The advance was fuelled by comments from the US Federal Reserve that the economic outlook had "improved modestly" as well as encouraging economic signs from Japan.

In Asia, Hong Kong's Hang Seng and Japan's Nikkei both saw overnight gains of almost 4%, while in Europe France's CAC 40 and Germany's Dax were also on the front foot. Wall Street's Dow Jones Industrial Average was 1% higher in early trading.

The advance in London was driven by banks as the better economic news improved risk appetite among investors, while more positive broker comments helped the sector.

Part-nationalised Royal Bank of Scotland was the leading top-flight riser, up almost 14% or 5p to 41.8p, its highest level since January.

It was closely followed by Barclays on the risers' board, up 25p to 281.5p - a six-month high - after upgrades from both UBS and RBS brokers. Lloyds Banking Group also featured strongly with an 8.5p gain to 112p, or 8%.

Investors also had plenty of corporate news to chew over. Satellite broadcaster BSkyB was 21.75p up at 486.75p, or 4%, after its big push into HD television appeared to be paying off in healthy third-quarter results.

Dairy Milk maker Cadbury was down for much of the session after disappointing the market with 2% sales growth in the first three months of the year, although it later recovered group to close 1p lower at 507.5p.

Among the insurers, Standard Life was down 2.4p to 190.3p after a 20% slide in worldwide life and pension sales, although Legal & General added 6.7p to 58.3p.

The leading Footsie faller was Argos owner Home Retail Group, despite UBS brokers lifting their target price on the stock following its annual results. It did little for the shares, which were down almost 5% or 12p at 251.75p.

In the FTSE 250, Currys and PC World owner DSG International saw shares rise 15% or 5.5p to 43p after the company announced plans to raise £310.6m (€347.4m). The gains came despite a steep rise in debts and disappointing second-half trading figures.

And William Hill was up almost 6% after it said a boost from gaming machines and the internet helped it overcome a tough start to the year in horse racing. Group revenues were 6.5% stronger in the first quarter of the year, leading shares 11.75p higher at 219.5p.

The biggest Footsie risers were RBS up 5p to 41.8p, Legal & General ahead 6.7p at 58.3p, Invensys up 19.3p at 199.6p and Barclays up 25p at 281.5p.

The biggest Footsie fallers were Home Retail down 12p at 251.75p, Admiral off 39p at 911p, Amlin down 13.25p at 360.75p and Compass off 10.25p at 324p.