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Lloyds Banking Groupwas among the top gainers as banks lifted the FTSE 100 to a new four-month high.
Banks are leading the Footsie's rise with Barclays and RBS topping the best performers.
1515: The FTSE 100 is above 5,500 for the first time since 4 May, though it hasn't actually closed above the big figure since 30 April. An early gain of over 50 points on Wall Street is helping. Demand for banks and miners has pushed the leading index as high as 5,505.
1410: Shares in ARM Holdings are higher after the chipmaker unveiled its new processor, the Cortex A15 MPCore. Barclays leads the banking sector higher. Home Retail is the heaviest faller after the Argos and Homebase owner said that unless Christmas is a cracker this year profits are likely to be in the bottom half of the range of analysts' estimates. FTSE 100 up 63 at 5,493.
1345: Initial jobless claims dropped by 27,000 to 451,000 in the week to September 4, more than expected.
Footsie has fully recovered from a weak start and now boasts healthy gains driven by the banks and miners.
1200: The Bank of England has held interest rates at 0.5%, as expected.
Footsie has moved into the blue following a weak start that came as retailers failed to impress the market.
1100: Footsie has moved sharply higher with the two powerhouse sectors of the banks and miners starting to make notable gains. Barclays and Royal Bank of Scotland are both ahead, while Vedanta and Lonmin lead the miners. Chip designer is top dog, though. Home Retail is bottom along with 31. FTSE 100 up 40 at 5,470.
0930: Britain's seasonally adjusted deficit on trade in goods and services swelled to £4.9bn in July from £3.9bn the month before, revised up from £3.3bn. The FTSE 100 is up 12 at 5,442.
0845: Retailers are dragging Footsie lower. Supermarket Morrisons falls back even though it posted profits broadly in line with expectations for the six months to August 1, though warned of slow growth. Homebase and Argos owner Home Retail Group disappointed the market with its prediction that unless Christmas is a cracker this year profits are likely to be in the bottom half of the range of analysts' estimates. B&Q owner Kingfisher is down in sympathy. FTSE 100 down 12 at 5,417.
Insurer Resolution, pumps manufacturer Weir and engineer Tomkins are replacing Home Retail, Segro and Cable & Wireless Worldwide in the FTSE 100 index.
1630: close It was a day of two halves for London with the market advancing in the afternoon session after a lacklustre morning. A firm start on Wall Street boosted sentiment; the Dow-Jones 30-shares was around 60 points higher at just over 10,400 towards the end of the morning session stateside. Back in the UK, ARM led the risers, buoyed by rumours that Korean manufacturing giant is going to switch to ARM technology for a new wave of consumer gadgets. Broker comment also gave ARM a hand, with UBS upping its price target to 370p from 305p. BP finished higher on the day when its internal investigation into the Gulf of Mexico tragedy confirmed that the UK company did bear some responsibility for the explosion, though BP said its partners who worked on the well were not blameless either. On the downside, Barclays finished lower after Business Secretary Vince Cable repeated calls for investment banking operations to be hived off from clearing bank activities. The call came just one day after the head of Barclays investment banking arm, Bob Diamond, was announced as the heir-apparent to Barclays chief executive John Varley. FTSE 100 was up 22 at 5.430.
Footsie put its weak start behind it to close with good gains, helped by buoyant trading on Wall Street.
1315: Footsie has moved into the blue after its sluggish start, helped by expectations of gains when Wall Street opens. Among the risers is BP, which has released its much-talked about report on the Gulf of Mexico oil spill. It was due to decisions by 'multiple companies and work teams' the company said. FTSE 100 up 7 at 5,415.
1205: BP has published its internal review into the causes of the Macondo well disaster in the Gulf of Mexico. It says decisions made by "multiple companies and work teams" contributed to the accident which arose from "a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces." BP shares were up ahead of the publication of the report on hopes it could reduce the liability faced by the company. Footsie, meanwhile, has recovered its earlier losses and is now flat. FTSE 100 down 1 at 5,406.
It's back to square one for London with the Footsie virtually unchanged at the end of the morning session after early losses were wiped out. News that the US markets look set to open firmer after yesterday's triple-digit fall for the Dow has bolstered confidence this side of the pond.
1015: Barclays is the heaviest faller now, helping drag Footsie into the red for a second day running. The bank announced yesterday that Barclays Capital boss Bob Diamond will become chief executive of the whole group. His proposed pay packet has sparked controversy. FTSE 100 down 29 at 5,378.
0930: UK manufacturing in July saw its strongest on year growth since 1994. Activity increased by 0.3% from the previous month and at an annual rate of 4.9%.
0910: Footsie is lower for the second day in a row, with Barclays bank down again, on talk of a possible row over the appointment of Bob Diamond as its new chief executive. Miners are also lower, with ENRC leading the sector down. FTSE 100 down 41 at 5,367.