FTSE 100 leaps nearly 5%

The FTSE 100 soared in afternoon trading on an insurance sector rally, gaining 4.88 per cent to rise to 3,715.23.

Sentiment was positive across all sectors, with only two stocks – Randgold Resources and BAE Systems – ending the session in the red, down 7.79 per cent and 0.67 per cent respectively.

Prudential headed the list of risers, climbing 20.65 per cent over the day to 249.75p, followed by rival Friends Provident, up 20.62 per cent.

Investors appeared to react favourably to the news Friends Provident is scrapping plans to sell its stake in F&C Asset Management, instead going ahead with a special distribution of F&C shares to investors.

Lloyds Banking Group, which saw its shares tumble yesterday on the news it will hand over a controlling stake in the bank to the government, rallied 15.10 per cent to 50.3p as investors took advantage of the low prices.

Ryan Kneale, market analyst at BetsForTraders.com, said: "The markets received an early Easter present this morning with a memo from Citigroup stating the beleaguered US bank was profitable in the first two months of 2009. This has given traders a new sense of optimism and banking stocks throughout Europe have rallied.

"However, in our opinion it is still too early to say if we really have hit the bottom now, or whether this is just a false dawn."