Commodities in demand as battered dollar keeps on diving

That, in turn, provided a further boost for the stock market as investors came in for miners and oil explorers.

Randgold led the way with a jump of 215p to 4928p as the price of the precious stuff touched a new record high of $1132.40 an ounce while the gold future touched $1132.70. Rio Tinto drew encouragement from the move, climbing 127p to 3260p, while Anglo American rose 67p to 2616p.

The Anglo-Swiss outfit Xstrata also put on 41p at 1055p despite chief executive Mick Davis flogging a total of 755,910 shares at 1026p on Friday, after exercising options at 239p. That left him with a cool profit of almost £6 million. Platinum producer Lonmin put on 48p at 1640p while the world's biggest miner, BHP Billiton, added 45½p to 1863½p.

The gains among oil companies were modest in comparison. Even so, Royal Dutch Shell added 8½p at 1809p, Cairn Energy 35p at 2906p and Tullow Oil 10p at 1250p.

The combined weighting of both the miners and oil companies was enough to lift the FTSE 100 index by 34.69 to 5331.07, enabling investors to extend last week's bull run.

Morgan Stanley has raised its rating on life assurer Aviva from equalweight to overweight and jacked up its target from 446p to 593p. The shares were unmoved on 407p.

HSBC has repeated its neutral rating on Marks & Spencer, ¼p cheaper at 372p, but has raised its target from 360p to 410p following the strong showing by the shares in recent weeks.

British Airways enjoyed a strong tail wind to lift its shares 4¾p to 221½p. Panmure Gordon has raised its target price from 160p to 225p but continues to rate the shares as neutral in the wake of the announcement of merger talks with Spanish carrier Iberia.

Tokyo shares edged higher in cautious trading, underpinned by retailers and other defensive shares. But banks took the edge off the market's performance while Hitachi fell sharply on news it is to tap the market for extra cash. Hitachi, Japan's biggest electronics firm by sales, fell 7.8% to 270 yen after saying it will raise up to £2.8 billion to shore up its capital.

Square Enix which fell 6.2% to 1999 yen after Mizuho Securities cut its target price for the games maker by 300 yen to 2600 yen, citing the planned overseas launch of the new version of its popular role-playing game series on 9 March.

Marui, which operates department stores and credit cards, rose 6.8% to 537 yen after Nomura Securities switched its rating to neutral from reduce. The Nikkei 225 Average closed 20.87 points higher at 9791.18.

Hong Kong shares were higher, with finance issues leading gains following various takeover talks. New listings remained in focus. Food packaging company CPMC rose to HK$7.05 (54p) on its trading debut, up nearly 31% from its issue price of HK$5.39, before steadying at HK$6.50. The Hang Seng Index rose 330.08 to 22,883.71.