The FTSE 100 surged this afternoon to close 2.26 per cent higher at 4,980.25 ahead of a crucial US vote on the emergency economic stabilisation bill.

After staying below 4,850 for the morning session, the index bounced back during the afternoon, gaining 109.91 from the previous day.

HBOS has continued its rally, and ended 17.87 per cent at 200.5p. Although this is a long way off its 52-week high of 987.98p, the bank’s share price last year, this is still much healthier than its recent low of 88p.

Lloyds TSB has been closely following HBOS’s climb and is up 10.78 per cent to 290.25p.

Mining stocks have staged a recovery this afternoon, led by Vedanta Resources, up by 11.73 per cent, while Eurasian Natural Resources Group climbed by 11.33 per cent.

British Airways, which reported lower traffic statistics earlier today, fell 7.13 per cent, while technology group Immarsat was also down by 5.48 per cent.

Ryan Kneale, market analyst at BetsForTraders.com, said: “The European markets are struggling for direction at present, as traders look to the US vote on the proposed banking bailout and brace for its implications.

“Traders are desperate not to be caught out, as the vote won’t come in until the European markets close. If it is a yes, then things should pick up, if it is another no vote however, then buckle up tight because it’s going to be a long long way down.”