S&P hits five-month high as FTSE passes 5,700

The S&P 500 has risen 1.2% to 1,295, its highest level since 1 August, helping extend gains in the UK and Europe.

London's FTSE 100 is now up 1.7% at 5,705, its highest intra-day level since  28 October. The German Dax has jumped 2.52% to 6,168.9 and the French Cac 40 has surged 2.55% to 3,207.43.

Meanwhile the price of Brent Crude has climbed 1% to reach $113.35 per barrel.

Investors were cheered by gains in Asia overnight where both Chinese and Japanese shares rose sharply.

Chinese markets were lifted after the government hinted it may implement further quantitative easing, despite reports of slowing export growth in the region. The Shanghai Composite index gained 2.7% on the news.

Coming alongside more positive US economic data, analysts said the indicators suggest the global economy might be able to overcome the stresses of the eurozone crisis.

Shares in troubled Italian bank UniCredit also rallied today after three days of falls.

The bank's rights issue, which runs to January 27, is seen as a test of investor appetite for European banks, which need to find €115bn by June to shore up capital buffers to better withstand the eurozone crisis.

UniCredit is now priced at €2.44, up 6.9%.