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FTSEputs in highest close in almost a year on bank gains

THE UK benchmark share index closed up 0.2 per cent yesterday as buoyant banks and defensive stocks countered weak miners and oils, keeping the index above 5,000 amid optimism over the pace of the rally seen since March.<br /><br />The FTSE 100 closed up 7.38 points at 5,018.85, its highest closing level since late September 2008. The index traded as low as 4,953.71 during the session.<br /><br />&ldquo;You come back to the old question &lsquo;do you want to stand in the way of a bulldozer?&rsquo; And the bull market is a bulldozer, and it&rsquo;s going up, and if you don't believe it, you&rsquo;re going to get flattened by it,&rdquo; said Jim Wood-Smith, head of research at Williams de Broe.<br /><br />The blue-chip share index has risen 45 per cent since hitting a six-year trough in March, though is still down over 7 per cent from its level prior to the collapse of US bank Lehman Brothers a year ago.<br /><br />&ldquo;The next very short-term target for the FTSE 100 is going to be 5,200 and after that it&rsquo;s 5,600 and then it&rsquo;s 6,000 -- but that&rsquo;s a wee way away yet,&rdquo; Wood-Smith said.<br /><br />Banks added the most points to the index, rebounding from falls earlier in the session, with <strong>HSBC, Standard Chartered </strong>and <strong>Lloyds Banking Group</strong> up between 0.3 and 1 per cent.<br /><br />However, ratings firm Moody&rsquo;s said the credit outlook for British banks remains negative for the next 12 to 18 months, reflecting weakness in the domestic economic environment.<br /><br />Defensive telecoms, pharmaceutical and tobacco stocks were in demand.<br /><br />Telecoms major <strong>Vodafone</strong> put on 0.7 per cent, while pharmaceutical giant <strong>GlaxoSmithKline</strong> added 0.6 per cent and <strong>Imperial Tobacco</strong> rose 0.3 per cent.<br /><br />Defence companies, also seen as less risky assets, were in favour, with <strong>BAE Systems </strong>grabbing the top spot on the FTSE 100 leaderboard, up 2.1 per cent, followed by <strong>Cobham</strong>, also 2.1 per cent firmer.<br /><br /><strong>Cadbury</strong>, which has soared this month after it rejected a bid approach from Kraft, advanced 1.4 per cent on the possibility the US company could go hostile.<br /><br />Energy stocks suffered as crude eased below $69 a barrel yesterday, after a decision by a major US commodities exchange to enforce limits on large positions increased uncertainty and the dollar strengthened slightly.<br /><br /><strong>BG Group, BP </strong>and <strong>Tullow Oil </strong>dropped between 0.1 and 2.3 per cent.