The latest shares rally gained momentum yesterday after ratings agency Moody’s decided against downgrading Spain to junk status.
The FTSE 100 index closed 40.4 points or 0.7 per cent higher at 5,910.9 following the previous day’s 1 per cent gain.
Angus Campbell, head of market analysis at Capital Spreads, said the bulls now have the 6,000 mark in their sights.
He said: “The rampant risk appetite that has been built up this week stepped up a gear as investors put the pedal to the metal ,pushing the FTSE towards a one-month high and within touching distance of a six-month high.”
Royal Bank of Scotland enjoyed a shares boost as its exit from the UK government’s toxic asset insurance scheme fuelled hopes of a return to the private sector.
Shares in the bank rose 6.1p or 2 per cent to 286.1p on news of its withdrawal from the Asset Protection Scheme.
Tesco surged nearly 3 per cent after broker UBS upgraded its price target on the supermarket chain, which it said was on the path to stability in the UK. Shares lifted 8.4p to 316.3p.
Miners benefited from the improved market confidence, with Eurasian Natural Resources up by 7 per cent – 23.8p to 352.2p – and Kazakhmys 51p stronger at 760p.
In a quiet session for corporate news, shares in drinks firm Diageo fell nearly 1 per cent after a second-quarter trading update fuelled worries about its performance in Asia Pacific. Shares in Scotland’s largest distiller were down 14p to 1,768.5p.
Elsewhere, tool and equipment provider Speedy Hire was lower, despite it saying that recent trading had been in line with expectations. Underlying revenues were 5 per cent higher, helped by its focus on regulated industries in the UK. Shares were off 0.8p at 30.3p.
NEW YORK: The S&P 500 rose for the third consecutive day after housing starts hit a four-year high, but the Dow was curbed by IBM after it posted weak revenue.
The Dow Jones industrial average gained 5.22 points, or 0.04 per cent, to end at 13,557. The Standard & Poor’s 500 rose 5.99 points to finish at 1,460.91, while the Nasdaq Composite advanced 2.95 points at 3,104.12.