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THE LONDON REPORT

BANKING and energy stocks fuelled a 0.8 per cent gain for the FTSE 100 by close yesterday, up for a fifth straight day, as sentiment on the outlook for the global economy improved further.<br /><br />Britain&rsquo;s blue chip index closed up 39.82 points at 5,163.95, its highest close since late September last year, having added 1.6 per cent on Wednesday.<br />Banks added the most points to the chip index as growing investor confidence in a global economic recovery bolstered risk appetite.<br /><br />Heavyweight <strong>HSBC</strong> gained 1.3 per cent, <strong>Lloyds Banking Group, Royal Bank of Scotland</strong> and <strong>Standard Chartered</strong> rose 0.5-2.5 per cent, though <strong>Barclays</strong> fell 0.5 per cent.<br /><br />&ldquo;There&rsquo;s a general feeling of well-being, and the markets are buoyant for the time being,&rdquo; said David Battersby, investment manager at Redmayne-Bentley. &ldquo;People who missed out on the rally so far don't want to be left behind.&rdquo;<br /><br />The FTSE 100 has risen 21.5 per cent this quarter and is on track to post its best percentage quarterly gains since the index was launched in 1984, but it is still down 4.6 per cent from a year ago, just before the collapse of Lehman Brothers.<br /><br />Energy stocks were in demand as crude rose towards $73 a barrel, taking a breather after a rise of more than 2 per cent a day earlier, with <strong>BP</strong> <strong>and Royal Dutch Shell</strong> adding 1.1 and 0.9 per cent respectively.<br /><br /><strong>Tullow Oil</strong> climbed 4.9 per cent after the oil explorer says it has struck what may turn out to be the largest oil find in Uganda, prompting brokers to upgrade ratings and target prices for the company.<br /><br />Against a backdrop of broadly firmer metals prices, miners also rose, with gold prices hitting 18-month highs for a second consecutive session.<br /><br /><strong>Randgold Resources, Fresnillo, Rio Tinto</strong> and <strong>BHP Billiton</strong> gained 0.2-1.5 per cent. Broker upgrades also lent support, with <strong>Antofagasta</strong> up 2.8 per cent as Cazenove upped its rating to &ldquo;outperform&rdquo;.<br /><br /><strong>Eurasian Natural Resources</strong> bucked the sector trend, shedding 2.4 per cent after the Kazakh mining group confirmed that it was mulling over a cash bid for <strong>Camec</strong>.