The FTSE 100 index extended Wednesday's 22-month closing high on Thursday as upbeat comments on US economic prospects and hopes of more impressive banking sector results when Bank of America reports tomorrow bolstered London-listed financials.
The UK benchmark added 28.8 points or 0.5% to 5,825.0, while the FTSE 250 index took on 43.5 points or 0.4% to 10,539.2.
Late Wednesday, the Federal Reserve’s monthly Beige Book revealed economic activity picked up in nearly all regions which, in conjunction with a rush of strong data from other areas of the US economy, set the tone for Asian and European markets this morning.
Meanwhile, in China, data showed the country’s first-quarter gross domestic product grew at a higher-than-expected pace while inflation growth was lower than expected. The news was seen to reiterate the view that world economy was on its way to recovery, commodities prices, including gold and most base metals, picked up once again. While these developments helped fuel some miners in the UK session on Thursday, they also raised fears that measures will be put in place to cool down China's economic growth, thus impacting resource stocks.
As such, FTSE 100 components Eurasian Natural Resources and BHP Billiton were among those miners that felt the pressure, down 1.0% and 0.9%, respectively.
Elsewhere on the top tier, banks HSBC, Barclays and Royal Bank of Scotland ticked up 3.0%, 2.6% and 2.3%, respectively, ahead of earnings from Bank of America tomorrow, which many are hoping will continue in a similar vein to JP Morgan's own impressive numbers yesterday. A sector upgrade from analysts at Exane BNP Paribas also attracted investors to European banks on Thursday.
Petrofac and Cairn Energy were also in demand amid sector consolidation news in the oil & gas space. US firm Apache is to buy Mariner Energy for $2.7 billion--a hefty 45% premium to yesterday's closing price. The deal, if approved, would help the oil and gas explorer move into deepwater areas, and comes days after Apache agreed to buy Gulf of Mexico assets from Devon Energy.