Commodities in demand as battered dollar keeps on diving

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

Randgold led the way with an advance of 216p to 4923p 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 153p to 3286p, while Anglo American rose 67p to 2616p. Kazakhmys also put on 25p at 1283p after reporting that gold production during the first nine months had reached 54,900 ounces and an average price of $762.50 an ounce.

Anglo-Swiss outfit Xstrata put on 62p at 1076p 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. Only last month he sold a further million shares which made him a profit of £8 million.

Platinum producer Lonmin put on 137p at 1729p following annual results which lived up to expectations while the world's biggest miner, BHP Billiton, added 45½p to 1863½p.

Gains among oil companies were modest in comparison. Even so, Royal Dutch Shell added 17p at 1817½p, Cairn Energy 42p at 2911p and BP 6½p at 587¾p.

The combined weighting of both the miners and oil companies provided the impetus for a charge on the 5400 level by the FTSE 100 index, which rose 60.74 to 5357.12, its fourth consecutive day of gains. Turnover was described as low. 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 1.8p firmer at 406.8p.

HSBC has repeated its neutral rating on Marks & Spencer, ½p cheaper at 371¾p, but has raised its target from 360p to 410p following the strong showing by the shares in recent weeks. However, Tate & Lyle dropped back 12p to 464¼p after UBS drop its rating on the sugar giant from neutral to sell.

British Airways lost an early lead to be traded ¾p lower at 216¼p. 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.

The market warmed to a cautiously optimistic trading update from Persimmon. The housebuilder said that it expected to complete the sale of 9000 homes this year. This is down 12% on the whole of last year, but the 5000 sold in the second half was up on the first six months.

The shares responded with a rise of 14½p to 474½p and also succeeded in lifting the rest of the housebuilders. Barratt Developments put on 5½p at 145½p with Bovis Homes up 18¼p at 459p, Redrow 3p at 158½p, and Bellway 55½p at 833¾p. Collins Stewart continues to rate Persimmon a hold with a 515p target.