Britain’s FTSE 100 index rose nearly 1 percent to its highest close since September 2000 on Friday as oil shares surged on talk of sector consolidation and miners gained on firmer metal prices.

The FTSE 100 index was little affected by the announcement of China’s central bank to let its yuan currency trade more freely and raise borrowing costs to rein in the booming economy. The move prompted the yen to jump sharply against the euro and dollar.

The UK benchmark index closed up 61.6 points, or 0.94 percent at 6,640.9, for a weekly gain of 1.1 percent. European shares also finished higher. “You can’t keep a good market down. The whole world wants to buy,” said Tom Hougaard, chief market strategist at City Index Markets.

“This feels like people aren’t getting enough of stocks at the moment. I think a lot of this is driven by people who have taken short positions. They are forced to cover these positions.”

Commodity shares contributed 52 percent of the index’s gains on firmer metal prices and on speculation of a possible tie-up between BP and Royal Dutch Shell . Both BP and Shell declined to comment.

BP advanced 2 percent and Shell put on 2.5 percent, while gas producer BG Group tacked on 1.3 percent.

In the mining sector, Vedanta Resources gained 4.5 percent to top the FTSE 100 gainers. Lonmin climbed 2.8 percent, Kazakhmys rose 1.6 percent and Anglo American climbed 2.1 percent.

Cadbury Schweppes advanced 1.7 percent as a source close to the sale process said it had received about a dozen expressions of interest in its U.S. drinks business, raising hopes that a sale price could top forecasts.

Cadbury unveiled plans in March to split its sweets and drinks units, fuelling speculation at the time of a 7 billion pounds sale of its beverage business.

Royal & Sun Alliance gained 2 percent as traders cited continued talk that Finnish insurer Sampo may bid for the UK company and after Credit Suisse raised its price target to 146 pence from 129 pence.

BA STAYS GROUNDED

British Airways was the day’s standout loser, down 2.9 percent after reporting a 13.3-percent decline in year operating profit and saying it was making a 350 million-pound provision for possible penalties from a price-fixing probe.

In the banking sector, Royal Bank of Scotland added 1.3 percent after the Wall Street Journal reported that it and Bank of America are in talks about LaSalle, the U.S. unit at the heart of a takeover battle for ABN AMRO .

The talks could open the door to a bid for all of ABN by RBS and its partners, Fortis and Santander , the newspaper said.

On May 3, a Dutch commercial court froze the $21 billion sale of LaSalle to Bank of America, a side deal ABN made in its agreement to be taken over by Barclays .

LaSalle is a key asset for RBS, which wants its consortium to trump the Barclays offer, but only if it can unpick the LaSalle deal.

Barclays gained 2 percent as investors speculated that any RBS deal on LaSalle could scupper the UK bank’s bid for ABN, rendering Barclays vulnerable to takeover.

Among other individual movers, Kingfisher fell 1.3 percent after HSBC cut its rating to “underweight” from “neutral”. (Additional reporting by Michael Taylor and Rebekah Curtis)

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