The top share index rose early Friday, as investors squeezed previously beaten down riskier assets such as banks and commodity stocks higher in a truncated final trading session before the Christmas break.

The UK equity market closes at 1230 GMT Friday for the Christmas break and re-opens on Dec 28.

London's blue chip index <.FTSE> rose 33.33 points, or 0.6 percent to 5,490.30 by 0841 GMT, extending the previous session's 1.3 percent rise, albeit in wafer thin volumes.

Santa Claus has finally come to town and is spreading some Christmas cheer among investors, Jimmy Yates, head of equities at CMC Markets, said.

The belated rally means the FTSE 100 is now nursing only a minor loss -- at its lowest the index was down 3.2 percent in December -- in a month usually reserved for unabashed buying from investors.

It's remarkable that the index has managed to nearly break-even given the concerns surrounding the global economy, but that's testament to stocks' valuations and returns offered on equities compared to other asset classes such as gilts and forex, CMC's Yates said.

FTSE 100 stocks currently trade on a price to earnings of 9.87, compared to an historical average of around 14, and dividend yield of 4.17 percent, according to Thomson Reuters data.

That compares favourably to the Bank of England's base rate of 0.5 percent and UK 10-year government bonds which yield around 2.05 percent.

Traders said bullish jobs and consumer data from the United States Thursday has helped boost investor sentiment enough to keep the FTSE above the key 50-day moving average of around 5,450.

Technical analysts said with volumes likely to remain thin in between Christmas and the index closing above 5,450 on Thursday, there remained a chance the FTSE 100 could attack 5,590 before the year-end, a level which the index attacked but fell away from earlier in the month.

With risk appetite back on for the time being among investors, integrated oils <.FTMNX1770> and miners <.FTNMX0530> were among the top performers, supported by higher commodity prices.

Oil giant BP gained 1.9 percent and miner Antofagasta added 1.1 percent.

Financials continued to climb higher following a fresh injection of cash from the European Central Bank earlier in the week, with Barclays up 1.1 percent.

There was an element of caution though among investors keen not to get too carried with recent gains, highlighted by plenty of defensive stocks littering the risers list.

Utilities National Grid , Centrica and SSE gained up to 2.0 percent, while drugmaker AstraZeneca added 0.3 percent.

(Editing by Hans-Juergen Peters)