Britain's top share index gained 0.5 percent in early trade Friday, starting the first trading session of 2009 in positive fashion, led by gains in miners, oils, banks and retailers following a strong end to 2008.
By 0842 GMT, the FTSE 100 index was up 19.76 points at 4,453.93. The UK blue chip index closed 41.49 points higher on Wednesday at 4,434.17, but finished a dismal 2008 with a 31.3 percent decline, the biggest annual fall in its 24-year history.
Gains by oils and miners fuelled the last-gasp rally in London at the end of 2008, and commodity issues were a big focus at the start of 2009.
Miners provided the main blue chip strength as the sector sought to put the woes of 2008 behind it, with Vedanta Resources , Antofagasta, BHP Billiton and Rio Tinto up between 2.6 and 6.6 percent.
Oil issues also gained though crude prices fell on Friday as traders bet a late-day rally which drove prices up about 14 percent on Wednesday was overdone.
Shares in Royal Dutch Shell, BP, BG Group, and Cairn Energy gained between 0.2 and 0.9 percent.
"The unprecedented events of 2008, and continuing fallout into 2009 will see a number of false dawns and continuing volatility throughout the coming year," said traders at CFD specialists Blue Index.
"We expect the index to trade across a broad range; it is likely the index will fall below 4,000 again if banking stocks fail to show signs of recovery, but we expect this to be partly countered by comparative strength in gold and resource stocks."
A recovery by hard-pressed banking issues also helped the FTSE 100 stay positive, with HSBC, Royal Bank of Scotland, HBOS , Lloyds TSB, and Barclays all gaining between 1.4 and 2.3 percent.
Prominent politicians are calling for a ban on short-selling of financial stocks to be extended by the City watchdog when it expires in two weeks' time, the Financial Times said.
Investors in Lloyds TSB and HBOS are likely to shun shares in the combined group, giving rise to the prospect of part-nationalisation, The Independent said.
The expected failure of the share offers will leave the government owning up to 43.5 percent of what will become Lloyds Banking Group, with a total investment of 17 billion pounds.
Retailers also rallied as John Lewis, the employee-owned group seen as a barometer of UK retail spending, said on Friday sales surged at both its department stores and upmarket grocery chain in the days before and after Christmas.
Marks and Spencer, which delivers a Christmas trading next week, added 0.5 percent, with Next gaining 0.7 percent, Kingfisher up 1.1 percent, Sainsbury ahead 2.2 percent, and Tesco up 0.2 percent.
But the downturn in consumer spending will drive over 1,600 British retailers out of business in 2009, triggering thousands of job losses and leaving more than one in ten shops empty, a report by market researchers Experian said on Thursday.
Drug stocks were the biggest FTSE 100 fallers, retreating after strong gains over the last sessions of 2008, with GlaxoSmithKline losing 1.8 percent, and AstraZeneca down 1.5 percent.
An annual survey of 67 leading economists by the Financial Times indicates a general belief that the Treasury's prediction of a recovery in the second half of 2009 is too optimistic, with unemployment thought likely to rise to around three million and house prices expected to fall throughout the year.
