The FTSE 100 closed at its highest level since May 2008 after an encouraging start to the US company earnings season put investors in London back in a buying mood.

Forecast-beating fourth-quarter sales from aluminium producer Alcoa, the first American firm to report its numbers, helped the UK’s benchmark index end two days of declines and climb 45.02 points to 6,098.65, adding £11.4bn onto the value of the blue-chips.

Investors had been wary that companies in the US, the world’s largest economy, would disappoint but the positive update from Alcoa lifted stock markets in Europe and America. Shares around the world had already experienced sharp rises last week, after US politicians agreed a compromise deal that averted the “fiscal cliff”.