Wall Street climbed to a new high for the year in early trading, helped by the group of 20 leading nations pledging at the weekend to keep economic stimulus in place until a recovery was assured.
The Dow Jones industrial average was up 81.24 points at 10,105.87, to a level last reached in October 2008.
In London, the FTSE 100 rose 79.08 points to 5,221.8 helped by buoyant mining and insurance stocks.
Gold climbed to a new high of $1,111.20 as a weakened dollar prompted investors to boost their holding of the precious metal. The moves follow India’s decision last week to use a portion of its dollar currency reserves to buy gold and also the G20 meeting of finance ministers at the weekend which indicated, traders felt, that policymakers were not duly concerned with the dollar’s weakness.
The meeting reinforced expectations that US interest rates will remain low for some time.
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Top of the leader board was Royal Bank of Scotland (RBS), which added 2.67p, or 7 per cent, to 39.73p.
Axa, which today launched a bid for its part-owned Asia Pacific insurance subsidiary, Axa Asia Pacific, said that it was not interested in RBS’s insurance assets, also on the block, which include Direct Line and Churchill.
Kazakhmys, which rose 82p, or 6.76 per cent, to £12.95. Fresnillo, the Mexican silver and gold miner, advanced 45.5p, or 4.4 per cent, to 884p and Rio Tinto rose 149.5p, or 5 per cent, to £30.65.
One of the biggest of the few fallers was Cable & Wireless, which lost 1p, or 0.72 per cent, to 137.9p. It had already fallen from 148p last week after it warning on profits. Today, analysts at Morgan Stanley cut their price target on the telecommunications group and warned that C&W’s cashflow no longer covered its promised dividend payout.
Group 4 Securicor (G4S), the world’s biggest security firm, was another big loser, off 2p, or 0.79 per cent, to 250.8p after nine month sales figures revealed a slight slowdown on its performance in the first half.