The top share index nosed ahead on Wednesday to close above 5,700 points for the first time since the end of October, 2011, as strength in heavyweight miners and banks countered falls in integrated oils.
The FTSE 100 <.FTSE> ended the day up 8.42 points, or 0.2 percent, at 5,702.37, just below the intra-day peak of 5,709.87, having bounced off a session low of 5,647.92 in a choppy session.
Volume was just under 90 percent of the 90-day average.
Risk-sensitive miners <.FTNMX1770> and banks <.FTNMX0530> led the gainers, helped by hopes the International Monetary Fund (IMF) will bolster its lending resources to help economies hit by Europe's debt crisis.
There was also relief in the euro zone after Germany saw good demand, and yields fall, at its most recent debt auction, while borrowing costs fell for debt-laden Portugal at a bond sale.
But news the World Bank had revised down its forecasts for global growth held enthusiasm in check.
Better-than-expected results from Goldman Sachs
Gains by Goldman helped Wall Street recover from opening falls on Wednesday, with U.S. blue chips <.DJI> up 0.4 percent by London's close.
A trio of UK blue chips rebounded after recent sharp falls.
Under-pressure hedge fund manager Man Group
The contrarians are feeling at least a little vindicated today, as Essar Energy, Man Group, and Carnival lead the FTSE 100 into the close, said David White, Trader at Spreadex.
All three companies have suffered dramatic selling on the open market, becoming the subject of debate for bargain hunters. Man Group and Essar have more than halved in value according to market cap in just the last 12 months, White added.
Oil explorer Tullow Oil
However, Oriel said the focus for Tullow should remain on its active exploration and appraisal programme which looks busy in 2012, and the broker retained an add rating on the stock.
Falls by integrated oils <.FTNMX0530> was the biggest drag as crude consolidated at $100 a barrel.
Broker downgrades also weighed.
And BT Group
Technical analysis of the FTSE 100 index remained cautious.
Since buying breakouts is not the preferred strategy at this time, then buying dips or pullbacks must be. If this pattern is going to continue, then traders should watch for a near-term retracement, said James A. Hyerczyk, analyst at Autochartist.
Based on the short-term rally of 5,583.50 to 5,724.41, the 50 to 61.8 percent retracement zone at 5,653.96 to 5637.33 could become a key support level, Hyerczyk added.
(Editing by David Cowell)