A clutch of insurance stocks helped drive the London market higher yesterday after an update from Friends Provident cheered the sector.

The stock was the highest top flight climber after saying an increase in business from independent financial advisors helped it boost UK sales by a fifth - leading to significant gains by rivals such as Aviva and Legal & General.

The momentum helped the FTSE 100 Index close 59.5 points higher at 4861.2, as it clawed back ground lost during a difficult few sessions last week.

With first quarter UK sales up to £88m, from £74m last time, Friends Provident shares stood four per cent higher, lifting 6.5p to 167p. Legal & General and Aviva also advanced two per cent each, up 3p and 12.5p to 107.25p and 601.5p respectively, and Royal & Sun Alliance added 0.75p to 76.25p.

Takeover talk also fuelled yesterday's gains as speculation over B&Q-owner Kingfisher made the stock the second highest Footsie climber. Kingfisher gained three per cent, or 8.25p to 253.75p, after a broker said weekend reports that private equity groups were considering bids could be near the mark.

The mood in the City was more upbeat than that across the Atlantic, where the Dow Jones Industrial Average was broadly flat ahead of an announcement on US interest rates. However, progress yesterday had boosted the Footsie in early trading.

Back in London, oil group Shell lifted 1.5p to 471p as investors welcomed news that it had reached a long-term gas exploration and development agreement with Libya's National Oil Corporation. It marks the company's first major project in the country for 30 years.

Rival BP also advanced 4.5p to 538.5p despite a slight fall in the cost of a barrel of US light crude to just above $50 yesterday.

Elsewhere, Marconi shares recovered some of their recent weakness, gaining seven per cent after it announced it was considering all strategic options. With a sale of the business seen as an increasing possibility, the stock rose 19.5p to 281p.

Shares in discount clothing retailer Matalan also lifted after reports said it was likely to sell jeans business Lee Cooper. The stock put on two per cent or 4p to 193p.

And food producer Dairy Crest, whose brands include St Ivel Gold, added 1.25p to 437.25p after saying it was in advanced talks to buy the dairy operations of Midlands Co-operative Society, which produces more than a million pints of milk a year.

Hotel Corporation, which part-owns a string of four-star hotels such as Edinburgh's Carlton and the Oxford Hotel in Oxford, cheered half a penny to 129.5p after posting excellent maiden results.

The biggest Footsie risers were Friends Provident, up 6.5p to 167p, Kingfisher adding 8.25p to 253.75p, Cadbury Schweppes, up 17p to 542p and ICI, adding 8p to 259.75p.

The heaviest fallers were ITV, Yell, BSkyB and National Grid Transco.