The blue-chip index closed on Friday with its biggest weekly gain since February, led by banks and miners, as markets looked to a weekend meeting of the IMF which aims to bolster its war-chest to ease pressure on debt-ridden euro zone economies.

The FTSE 100 index <.FTSE> closed up 0.5 percent, rising 2 percent on the week, recovering early losses. Banks <.FTNMX8350> were among the best performers on the day, reflecting a wider rebound in European lenders <.SX7P>, which jumped 2 percent.

Lloyds Banking Group led the pack, gaining 2.5 percent in high volume after Investec repeated its buy rating.

The equity markets have held up fairly well to slightly more questionable U.S. data and uncertainty on Spanish bonds... we have argued that it is quite a bullish sign that the market has held up as well as it has and we think the market will move forward reasonably quickly from here, said Ewen Stewart, UK Strategist at Investec.

Growth-sensitive mining stocks added 8 points to the index, led by Anglo American and Rio Tinto , helped by a better-than-forecast Ifo German sentiment survey.

Oil and gas stocks <.FTNMX0530> had dragged on the index as the highest sectoral faller before slightly paring losses, which were led by BP wiping almost 4 points off the index.

British oil explorer Rockhopper shed 7.8 percent on disappointment linked to the potential size of its Sea Lion oil field in the Falkland Islands, and on a lack of progress with a plan to bring in a new partner to help develop the field.


Chip designer ARM Holdings shed 3.7 percent, the biggest faller on the FTSE, echoing losses for U.S. tech stocks on earnings concerns after chipmaker Qualcomm Inc warned of supply issues.

The chip shortage is negative for the iPhone 5 and therefore negative for Apple and ARM (as the iPhone uses ARM-designed chips), a London-based trader said.

Looking ahead to Monday, the markets will focus on the results of the IMF meeting and Sunday's first round of French presidential elections.

Many investors are wary about the expected eventual election of a Socialist French president and some have placed early bets that bond yields will rise, the euro will fall and equities will be more volatile.

(Editing by Nigel Stephenson)