THE FTSE 100 Index capped a bullish week yesterday with another 1.4 per cent rise thanks to economic cheer and a betterthan- feared update from Royal Bank of Scotland.

RBS soared by 14 per cent after reporting strong investment banking results and losses that were not as bad as some had expected, despite news of £2.9bn in bad debts.

The wider FTSE also made strong advances, closing up 63.4 points at 4462.1, as investors took heart from signs the recession may be bottoming out – on these shores and in the US.

Today’s gains on the FTSE 100 helped it bank a rise of 4.5 per cent since the start of the shortened week, pushing it further towards the psychologically key 4500 barrier.

RBS held firm at the top of the risers, with shares ahead 5.8p at 47.4p.

Lloyds Banking Group edged higher, clawing back some of the fall seen the previous day after its trading update revealed hefty bad debts. Shares rose 3.7p to 100.7p. HSBC rose 22.5p to 577.5p ahead of a trading update due on Monday and Barclays rose 5.25p to 281p.

Travel firm Thomas Cook dropped 15p to 276.5p, despite more positive comments on the firm from Citigroup.

Insurers also gave back some of their recent gains, with Legal & General down the most with a fall of 2.9p to 69p. Standard Life followed, off 3.7p at 193.1p.

In the FTSE 250, Carphone Warehouse rose six per cent, or 9.5p to 167.5p, after the company paid £236m for the UK business of Tiscali – a move that will make it the country’s biggest residential broadband supplier.

Private equity firm 3i was also higher after it launched a £732m rescue rights issue. Shares were up 14 per cent.

Housebuilder Taylor Wimpey’s shares plunged 23 per cent, or 11.25p to 37p, after it announced plans for a rights issue to raise £510m.