BRITAIN’S top share index ended sharply higher yesterday, snapping a four-day losing streak, with commodity and banking stocks rallying after comments by a senior US Federal Reserve official.<br /><br />The FTSE 100 index finished up 104.09 points, or 2 per cent, at 5,355.50 and recorded its biggest one-day percentage rise in more than six weeks. The index closed 0.3 per cent lower on Friday after falling in the previous three sessions.<br /><br />The UK blue chip index is up 20.8 per cent this year and has soared more than 50 per cent since touching a six year trough in March, but remains 1.1 per cent off levels prior to Lehman Brothers’ collapse.<br /><br />“London shares have raced ahead today, as the dollar’s recent strength tapered away after weekend comments by a Federal Reserve board member that monetary policy would remain loose into 2011,” said Michael Hewson, analyst at CMC Markets.<br /><br />“These comments prompted a renewed appetite for risk which has buoyed interest in mining and banking shares across the board,” he added.<br /><br />St. Louis Federal Reserve President James Bullard said on Sunday the Fed should keep alive its mortgage-related assets purchase program beyond a planned end date to help stimulate the economy. <br /><br />Banking issues, which tend to be beneficiaries of increasing risk appetite, rose strongly. Barclays Standard Chartered and Royal Bank of Scotland rose 2.7 to 5 per cent.<br /><br />Lloyds Banking Group added 3.8 per cent after it said it had agreed to swap £8.78bn of bonds as part of a deal aimed at funding its exit from a costly state-backed insurance scheme for bad debts. <br /><br />Miners posted chunky gains as metals prices rose across the board, bolstered by a weaker dollar, with gold touching new historic highs during the session.<br /><br />Eurasian Natural Resources, Randgold Resources, Fresnillo , Lonmin, Xstrata, and Rio Tinto gained 2.8 to 4.3 per cent.<br /><br />“With no end in sight for the dollar’s slump, gold’s success looks set to continue pushing the FTSE towards the psychological 5,500 barrier,” said Philip Gillett, sales trader at IG Index.<br /><br />Sales of previously owned U.S. homes rose in October at a faster-than-expected pace to the highest in more than two-and-a-half years as buyers rushed to take advantage of a popular tax credit. <br /><br />The data strengthened risk appetite, with energy stocks in demand as crude prices also benefited from the weaker dollar.<br /><br />BP, Royal Dutch Shell and BG Group added 1.2 to 2.1 percent.<br /><br />Tullow Oil bucked the trend, shedding 0.3 percent as investors assessed the implications of the sale by Heritage Oil of its Ugandan operations, in which Tullow is a 50 percent partner.<br /><br />Mid-cap explorer Heritage shed 5.1 per cent as the news of the Ugandan disposal to Italy’s Eni for up to $1.5bn was balanced by the ending of merger talks with Turkey’s Genel.