Despite the prospect of more bad news in the banking sector, the FTSE 100 has ended an eventful week on a high note, easily topping the 6000 mark.
Buoyed by a strong start to trading in Wall Street, the top company share index has ended up 76.1 points, or 1.3%, at 6,056.5
In the US, the Dow Jones industrial average is up nearly 2% at about 12,864.
Wall Street traders shrugged off a $5.1bn loss from US investment bank Citigroup, suggesting that they see the credit crisis nearing an end.
Citigroup shares rose while manufacturers Honeywell International and Caterpillar encouraged the market by reporting stronger than expected results, helping to lift the Dow to a three-month high.
In the London market, banks are among the top risers, recovering earlier loses after concerns about a possible £12bn rights issue from Royal Bank of Scotland dragged down the sector.
RBS has closed 5% higher at 384p, while Alliance & Leicester has also ended 5% higher at 534p.
Oil shares made further gains as crude oil prices stayed near record highs.
BP added 1 % to 568p and Royal Dutch Shell 4p to £18.99p.
