As the day of reckoning dawns on Friday for banks across Europe, stock market traders are expecting the UK high street's big names to be unscathed by the stress tests.
Barclays and Lloyds helped lead the strong march higher by the FTSE 100 on Thursday as investors generally expected that the bad news in bank stress tests published by the Financial Services Authority and its counterparts across Europe would be felt outside the UK.
After a shaky start on the back of Ben Bernanke's gloomy US outlook the night before, the FTSE managed to close at its highest level for more than two months as banks, miners and energy companies joined forces to drive the rally.
The bluechip index finished up 99.2 points, or 1.9%, at 5313.8, the highest since May 13.
Barclays was the top-performing bank, up 4.6% at 303.7p with Lloyds close behind, rising 4.2% to 63.6p and HSBC rose 2.7% to 655p. Just RBS was in the red, down 1.1% to 44.7p.
Commodity markets battled with factors tugging in either direction as traders digested Federal Reserve chairman Bernanke's remarks that the world's largest economy faced "unusually uncertain" prospects. At the same time indicators on activity in the euro zone's private sector surprised on the upside and the dollar weakened, helping copper prices to climb to a two-month high.
That saw London's slew of miners put in strong gains, with Kazakhmys up 5.2% to £11.63 and Anglo American up 2.8% to £24.77.5. A rise in the oil price helped Royal Dutch Shell add 2.7% to £17.59.5 and Cairn Energy climb 4.4% to 472.3p.
Finally, Capita, the outsourcing specialist buffetted in recent weeks by worries over public spending cuts, had a happier day after posting a 15% rise in first-half pre-tax profits to £163.1m.
The company, which collects the BBC licence fee and works for local councils, reassured investors that it had secured new and renewed major contracts worth £523m and that it was "enjoying a very healthy flow of new business opportunities."
"There is buoyant demand for outsourcing across both the private and public sectors, with the most active markets in our strong bid pipeline remaining local government and life and pensions," said chief executive Paul Pindar.
The shares closed up 3.8% at 737p but they are still down 10% since the election and some analysts remain cautious.
"In the short term sentiment over potential margin pressure on public sector work is likely to hold back the share price," said Robert Morton at Investec.
You have characters left
Please read our community standards.
Closing this window without pressing "Post your comment" will result in your words being lost.
Are you sure?
Thank you for your comment. This has been submitted for moderation.
Your comment has been successfully posted.
Sorry, something has gone wrong and this action cannot be completed. Please try again later.