Markets maintained their positive bias on Friday morning as traders showed confidence ahead of a key reading of labour-market strength in the US later on, the February employment report.
Increased risk appetite in London meant that financial stocks were leading the way higher today.
Expectations rise ahead of US jobs report
The Labor Department data, out at 13:30 London time, is expected to give an indication of how the world's largest economy is faring in 2013 following the disappointing growth in the fourth quarter of last year.
The consensus forecast is for a 160,000 increase in non-farm payrolls in February, slightly ahead of the 157,000 gain the month before. However, a much better-than-expected ADP employment report on Wednesday and a decent outcome for jobless claims yesterday has led many to expect another strong figure today.
In fact, analysts at Unicredit see non-farm payrolls increasing by 175,000.
The KBC Market Research Desk said: "Overall, we believe that the risk is for a stronger outcome as the confidence indicators suggested that the economic climate has improved further during the month, while continued fiscal uncertainty apparently had no impact. Also the January outcome might be upwardly revised, brightening the overall picture of the report."
Chinese data provides a lift
Also supporting stocks today is economic data from China, which sparked hopes that global demand may be recovering.
China reported a 21.8% jump in exports in February, well above the 10.1% rise expected, following the strong figures the month before. Imports however missed forecasts, registering their largest drop in the last 13 months.
"A strong Chinese economy, in the same way as the US, is beneficial for the global economy as a whole so positive data out of China tends to be reflected in most stock indices," said Market Analyst Craig Erlam from Alpari.
"This is especially true at a time when the financial markets are being flooded with liquidity, traders are simply waiting for any excuse to join the rally."
Financial stocks up before data
Shares in financial companies were making decent gains in early trading as risk appetite increased ahead of the US jobs report later on.
Asset management firm Schroders was among the highest risers on the FTSE 100 after UBS upgraded its rating for the stock from 'sell' to 'neutral' and lifted its target price from 1,700p to 2,050p following yesterday's full-year results. The broker upped its forecasts for 2013 and 2014, saying that most of the headwinds that it saw three to six months ago are "reducing materially".
Banks were also performing well in spite of reports that new accounting rules by the International Accounting Standards Board (IASB) could hit lenders with billions of pounds in new losses. The IASB is expected to ask banks to record losses far earlier in an attempt to make the financial system less prone to a crisis. Nevertheless, HSBC, Lloyds, Barclays and Standard Chartered were trading firmly in the blue.
HSBC was also given a boost by Nomura which retained its 'buy' rating on the stock this morning following the bank's full-year results earlier this week. The broker highlighted the company's strong cost-control momentum, improving revenue outlook and decent capital position.
Insurance giant Aviva was rebounding, albeit only slightly, after plummeting on Thursday. Shares sunk yesterday as the company slashed its dividend for 2012 after swinging into the red as it took a £3.3bn write-down on a disposal in the US.
Meanwhile, telecoms group Vodafone was higher today after its New Zealand arm won a 10-year communications deal with the police, providing them will customised mobile services and smartphones.
Utilities group Centrica was among the fallers after JPMorgan Cazenove downgraded the shares
from 'overweight' to 'neutral'. While the stock remains one of the broker's top picks in the sector, it said that it is lowering its recommendation "given the shares' rerating over the last year".
FTSE 100 - Risers
Evraz (EVR) 265.40p +4.78%
Schroders (SDR) 2,132.00p +2.21%
HSBC Holdings (HSBA) 733.90p +2.19%
Wood Group (John) (WG.) 869.50p +1.64%
Aviva (AV.) 319.90p +1.62%
Vodafone Group (VOD) 181.45p +1.60%
BT Group (BT.A) 268.10p +1.55%
Eurasian Natural Resources Corp. (ENRC) 349.90p +1.54%
British American Tobacco (BATS) 3,569.00p +1.48%
Standard Life (SL.) 378.50p +1.47%
FTSE 100 - Fallers
Aggreko (AGK) 1,890.00p -2.53%
Sage Group (SGE) 345.30p -1.93%
Randgold Resources Ltd. (RRS) 5,430.00p -1.54%
Fresnillo (FRES) 1,482.00p -1.33%
Tate & Lyle (TATE) 821.50p -1.26%
United Utilities Group (UU.) 717.00p -1.24%
Babcock International Group (BAB) 1,091.00p -1.18%
Royal Bank of Scotland Group (RBS) 299.90p -1.09%
ARM Holdings (ARM) 936.50p -1.00%
Centrica (CNA) 352.60p -0.96%
FTSE 250 - Risers
New World Resources A Shares (NWR) 254.00p +5.39%
Centamin (DI) (CEY) 54.50p +4.71%
Bumi (BUMI) 338.30p +4.41%
Halma (HLMA) 514.50p +3.40%
Henderson Group (HGG) 168.20p +2.81%
Investec (INVP) 510.00p +2.68%
National Express Group (NEX) 209.80p +2.59%
Ferrexpo (FXPO) 215.60p +2.33%
Cairn Energy (CNE) 292.70p +2.24%
Stobart Group Ltd. (STOB) 87.00p +2.11%
FTSE 250 - Fallers
Kenmare Resources (KMR) 32.94p -2.02%
African Barrick Gold (ABG) 233.20p -2.02%
Salamander Energy (SMDR) 204.00p -1.83%
Dixons Retail (DXNS) 31.35p -1.75%
BH Global Ltd. GBP
Shares (BHGG) 1,193.00p -1.73%
Big Yellow Group (BYG) 379.90p -1.63%
Smith (DS) (SMDS) 227.70p -1.60%
QinetiQ Group (QQ.) 201.90p -1.42%
Drax Group (DRX) 623.50p -1.34%
Diploma (DPLM) 610.00p -1.21%