Record rally for FTSE
London's blue chip share index overcame early jitters to resume its 25-year record summer rally today.
Big gains from heavyweight stocks such as Vodafone drove the market to a new 10-month high and further towards the key 5,000 barrier.
The Footsie had fallen more than 30 points early in the session, but recovered to close 20.6 points higher at 4917.
Nationalised Royal Bank of Scotland was one of those to race higher on vague market talk that it may be able to pay back some of the Government's 70% stake.
Its 3.9% shares gain saw taxpayers return to a paper profit of more than £1bn (€1.14bn) on the holding.
American stocks were also surging after a report revealed US consumers are regaining some confidence and following news of Ben Bernanke's reappointment as Federal Reserve chairman.
The benchmark Dow Jones Industrial Average rose more than 0.8% in early trade.
London's FTSE 100 Index was driven higher by telecoms firms such as Vodafone and Cable & Wireless after a sector-wide upgrade by JP Morgan.
The broker said that while metal and mining stocks had outperformed telecoms by 30% since March, the time was now right to reverse the exposure.
Vodafone rose 3.1p to 134.15p and Cable lifted 4.1p to 148p.
The JP Morgan note dealt a blow to the commodity sector, with Kazakhmys retreating 35p to 945p, Antofagasta off 24.5p at 789.5p and Eurasian Natural Resources 22.5p lower at 874p.
Lloyds Banking Group was also lower after a recent strong run, down 0.14p to 107.83p, in a mixed session for banks.
RBS meanwhile soared to its highest close since the beginning of the year, up 2p at 53.75p. With the average taxpayer share bought at 50.5p, the rise lifted the State's shareholding above water, despite market speculation deeming any early payback of Government shares as highly unlikely.
The bank was also at the centre of media attention after its decision to cap pension increases for staff and following reports that the sale of some of its Asian assets to Standard Chartered was in trouble.
Elsewhere in the Footsie, car insurer Admiral fell 3% or 28p to 1044p, despite profits rising 5% to £105.3m (€120.18m) and signs of a move to expand into the American market.
In the FTSE 250 Index, Punch Taverns enjoyed a rare rally after the pub company reported a steadier trading performance at its tenanted estate. Shares rallied 23.3p to 130.9p, a gain of 22%.
It was followed closely by office space company Regus, which climbed 15% or 12.5p to 96p after the company increased its dividend, despite a 7.4% drop in half-year pre-tax profits.
The biggest Footsie risers were Man Group ahead 12.9p at 280p, Royal Bank of Scotland up 2p at 53.75p, British Airways up 6.7p at 196.6p and Cable & Wireless up 4.1p at 148p.
The Biggest Footsie fallers were Kazakhmys down 35p at 945p, Antofagasta off 24.5p at 789.5p, Admiral down 28p at 1044p and Eurasian Natural Resources down 22.5p at 874p.
