Britain's top share index rose on Friday, closing in on recent three-month highs, as markets recovered their appetite for risk ahead of the U.S. non-farm payrolls release, which could open the door for fresh central bank stimulus.
Following Thursday's disappointment at the lack of action by the European Central Bank, investors focused on July's U.S. jobs data, due at 1230 GMT, which are forecast to show a rise of 100,000 in July, after an 80,000 increase in June, with the unemployment rate seen static at 8.2%.
"There is a strong upside momentum in the FTSE 100, a healthy correction after yesterday's selloff as the risk appetite returns to the table ahead of the U.S. employment figures this afternoon," said Sucden Financial Private Clients analyst Myrto Sokou.
"The market is expecting quite solid figures," she added.
Even if the employment numbers miss the forecasts, they could lift market sentiment as that might prompt the U.S. Federal Reserve to launch further stimulus measures.
"If the U.S data is not good, then that will be an excuse for the Fed to take another round of QE," said Kames Capital strategist Bill Dinning.
At 1150 GMT the FTSE 100 was up 78.44 points, or 1.4%, at 5,740.74, as more than 90% of the stocks in the index were reporting gains.
RBS was the top FTSE 100 gainer, as its shares recovered from a sharp fall in the previous session and climbed 5.2%, after it reported first-half operating profit of 1.83 billion pounds, broadly in line with expectations.
RBS trading volume was also strong, at around 84% of its 90-day daily average, more than three times the activity on the broader index.
Peer Barclays joined RBS in the top gainers list, giving a lift to the overall banking sector, which rose 3.4% and added 17.4 points to the FTSE 100 index, making it the best-performing sector.
International Airlines Group was among the losers on Friday, dropping 4.3% to become the session's worst performer after reporting a first-half loss and cutting its full-year earnings guidance, hit by slower spending on air travel amid the euro zone debt crisis, and by high fuel prices.
The owner of British Airways and Iberia, and the fourth-biggest airline group by market value, IAG announced a wholesale restructuring of the underperforming Spanish airline.
