FTSE closes at 6064.2

The FTSE 100 Index has closed up 205.3 points at 6064.2.

Investors breathed a sigh of relief after the FTSE 100 Index reversed almost all of its losses from Thursday's bloodbath.

The benchmark index returned above the psychological 6000 barrier as the US Federal Reserve's decision to cut the amount it charges banks to borrow money delivered a shot-in-the-arm for shaky credit markets.

The FTSE had been nervy for most of the session, but closed up after the move by US policymakers caused markets worldwide to rally.

London's gain of 3.5 per cent was its biggest since March 2003, but analysts questioned whether the rally was sustainable.

Financial and mining stocks dominated the FTSE risers board as investors reversed some of the heavy losses seen in recent days.

Asian-facing bank Standard Chartered set the pace with a gain of 116p to 1560p, a gain of 8 per cent, while insurer Standard Life advanced more than 7 per cent, or 20p, to 305.5p.

Mortgage lender Northern Rock staged a much-needed recovery after the banking stock bore the brunt of the sector's funding concerns earlier in the week. It endured another rollercoaster ride today, but eventually closed 50.5p higher at 709.5p, a gain of almost 8 per cent.

Elsewhere in the financial sector, Icap gained 29.5p to 484.5p, Royal Bank of Scotland cheered 32.5p to 575.5p and Barclays added 34.5p to 639.5p.

Miners also achieved a marked turnaround from earlier in the session, as fears about a drop-off in demand faded. Lonmin advanced 182p to 2974p, Antofagasta added 36.5p to 644.5p and Xstrata cheered 147p to 2656p.

Advertising and marketing group WPP spent much of the session in negative territory, reflecting comments from the business that 2009 could be a tougher year. But the stock still closed 19p higher at 699.5p, as analysts focused on a 7 per cent rise in half-year profits and a healthy margin performance.

Shares in confectionery firm Cadbury Schweppes were also down for a while, amid uncertainty over prospects for the sale of its American drinks arm. The disposal is in doubt because of the weak credit markets, while Cadbury shares were further hit by a downgrade from Citigroup yesterday. Shares topped the Footsie fallers board but later recovered to finish 23p higher at 557.5p.

Winners: Standard Chartered up 116p at 1560p, Northern Rock ahead 50.5p at 709.5p, Standard Life up 20p at 305.5p and Lonmin ahead 182p at 2974p.

Losers: ICI down 1p at 616p and Tesco off 0.5p at 403.5p.

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