The leading share index jumped higher on Friday, led by a rebound in risk-sensitive bank and commodity issues, as investors positioned themselves ahead of key U.S. jobs data and a crucial summit next week to tackle the euro zone crisis.

The FTSE 100 <.FTSE> was up 89.53 points, or 1.6 percent at 5,578.87 by 9:05 a.m., resuming a rally after Wednesday's 3.2 percent leap, having slipped 0.3 percent on Thursday.

Markets continue to the upside as traders look to non-farm payrolls after recent strong data out of the U.S., as this together with the EU summit next week means no investors wants to be caught short, said Mic Mills, head of electronic trading at ETX Capital.

U.S. non-farm payrolls due at 1:30 p.m. were forecast to rise 122,000 in November, after an 80,000 rise October, with the unemployment rate seen unchanged at 9.0 percent.

Meanwhile, France's president, Nicolas Sarkozy, called for a new treaty incorporating tougher budget discipline, a European Monetary Fund to support countries in difficulty, and decisions in the euro area taken by majority vote instead of unanimity.

Sarkozy said he and German Chancellor Angela Merkel would meet on Monday to outline joint proposals to put to a December 9 EU summit, seen as make-or-break for the 12-year-old single currency.

Banks provided the biggest boost for the blue chips, rallying after falls in the previous session, led by Barclays and part state-owned Royal Bank of Scotland , both up around 4 percent.

The sector was supported by hopes for further action to alleviate the euro zone sovereign debt crisis and after Wednesday's co-ordinated move by central banks to inject liquidity designed to help ease banks' funding constraints.

Miners also bounded higher after falls in the previous session, led by Xstrata up 3.2 percent, as copper prices edged higher on hopes that U.S. jobs data could beat expectations, helping underscore an improving demand picture for the sector.

Integrated oils got a boost too as crude prices rallied 0.8 percent, with BP

BP has agreed to sell its Canadian natural gas liquids business to Plains All American Pipeline
for $1.67 billion (1.06 billion pound) as part of an effort to raise $45 billion to pay for its Gulf of Mexico oil spill in 2010.

FALLERS RARE

There were few blue-chip fallers early on.

Motor insurer Admiral Group shed 1.8 percent as RBC Capital started coverage of the stock with an underperform rating and 890 pence target price, and Investec cuts its target price back to 570 pence from 843 pence.

Rolls-Royce fell 0.5 percent as UBS downgraded its rating to sell from neutral and trimmed its target price to 600 pence from 610 pence while raising its EPS estimates by 19 percent, saying the stock was still expensive.

On the second line, staffing firm SThree was the biggest casualty, down 10.7 percent after its in-line trading update prompted Investec Securities to cut its target price.

Technical analysis of the FTSE 100 index was cautious.

The short-term term outlook indicates that overbought conditions and the lack of buyers at current levels means this index is poised for a near-term correction, said James A. Hyerczyk, analyst at Autochartist.

Based on the rally from 5,075.20 to 5,553.89, there may be a break back to 5,314.55 to 5,258.06. This may be necessary to attract fresh buyers. Given the recent bearish conditions, it does not make sense for a value investor to start buying in the 5,500 range when he could have bought last week under 5,100.

(Editing by Dan Lalor)