The FTSE has risen by 0.5%, or 27.8 points to 5342.92 today, buoyed by unexpectedly cheery news for banks.
Lloyds Banking Group rose by 3.4% to 53.5p after analysts Bloomberg polled said they expected a £1.6bn second half net loss, down from £6.9bn for the same period in 2008, when Lloyds reports on Friday.
HSBC rose by 2.4%, to 717.8p. There was news today it may not increase chief executive Ben Geoghegan's base salary by up to 40%, to £1.5m this year.
Managers at rivals Barclays, Royal Bank of Scotland and Lloyds have already shunned increases.Save and publish
Cruise ship operator Carnival also rose, by 3.5% to £24.29 after announcing a 5% price increase, from March, for summer cruises.
One of the largest fallers, Reckitt Benckiser Group (off 1.5% to £34.29), was ex-dividend.
In the US, the Dow Jones is up 0.8%, or 84.9 points, at 10,367.36, despite figures showing new home sales in January fell by 11.2% month on month, and 6.1% over 12 months.
Analysts expected 350,000 - they were given 309,000 in the governmental report published today.
Financial stocks led the pack in US morning trading.
Bank of America Corp rose 2% to $16.26, while JP Morgan Chase & Co rose 1.6% to $40.51 and American Express Inc was up 1.9% at $38.63.
In macro economic news, German fourth quarter GDP contracted 2.4%, just as analysts' median forecast had predicted.
