FTSE closes fraction higher for second day

After a decline in afternoon trading, the FTSE 100 rallied to close 0.37 per cent higher than yesterday.

The FTSE 100 closed at 4,258.36, well above the 4,000 mark for the second day as mining and financial stocks lifted the UK's benchmark index.

Vedanta Resources rose 15.75 per cent, while Cairn Energy was up 15.16 per cent.

Lloyds TSB rose 10.21 per cent, while Friends Provident finished 11.17 per cent ahead.

Despite their soaring profits, BP and Shell shares are trading lower. Shell was down 4.85 per cent down and BP dropped 2.22 per cent, as the price of crude fell further.

Ryan Kneale, market analyst at BetsForTraders.com, said: "Today's rally is really just a continuation of the improved sentiment from yesterday, following a series of interest rate cuts around the globe including the US, where the Fed took rates to just one per cent.

"There is now more scope than ever for the European Central Bank and the Bank of England to cut their key interest rates next week, which will further boost trader sentiment and inter-bank lending."