What's driven FTSE 100 to four-week high?

I said yesterday that if neither Brexit nor a vision of Donald Trump in the White House could convince traders to dump shares, the Italian referendum didn't stand a chance. With a second US interest rate hike in 10 years next week already priced in, seems there's no reason to sell.

In fact, after seriously underperforming US equity markets, especially since Donald Trump's election win, London has some catching up to do. And there are grounds for optimism in what is typically a seasonally stronger quarter for equities.

The FTSE 100 is up over 100 points to its highest since 10 November, smashing back above the uptrend since the EU referendum (see chart below). It's also threatening a negative trend line drawn from October's record high. A confirmed break here would leave the index in clear air.

According to technical analyst Alistair Strang, if the FTSE 100 betters 6,890 we could be on for another 100-point rally.

It needs massive bailouts, but traders are betting  Italy's financial system won't collapsePredictably, the headlines already scream "Santa rally", including our own, as US money manager Lance Roberts shares some words of wisdom. It's definitely worth a read.

Wednesday's leading pack is a heady mix of miners and financials, topped by Rio Tinto, up 4.5% mid-morning. Credit Suisse wins the thanks after upgrading its rating from 'neutral' to 'outperform', based largely on better supply/demand balance.

Glencore gets the nod from analysts at the Swiss broker, too, and even BHP Billiton quickly overcame early losses triggered by a downgrade to 'neutral'.

It requires massive bailouts to avoid catastrophe, but traders are betting big that Italy's financial system is not, in fact, close to collapse. Resurgent banks, including Royal Bank of Scotland, Standard Chartered, Lloyds and Barclays are caught up in the optimism.

As predicted by Alistair Strang here today, Barclays appears to be magnetically drawn to 250p. Investors are certainly convinced there's further upside.

High-yielding insurers Legal & General and Aviva, and attractive peers Old Mutual and Prudential caught the eye of buyers.

British Airways owner IAG resumed its recent rally as part of the ongoing switch into "value" plays.

Despite triple-digit gains, a quarter of the blue-chip index remains in the red Wednesday. Inevitably, no-one wants to own safe-haven utilities like Severn Trent and United Utilities when traders are this bullish.

Despite a small increase in the underlying commodity to $1,171 an ounce, gold favourites Randgold and Fresnillo are unloved. Martin Sorrell's ad giant WPP is out of favour, too, amid reports in the US that officials are probing allegations of industry-wide bid rigging.

Carillion is worst FTSE All-Share performer, down 5%.

The pace of new order intake has slowed in the second half, it warns, as low oil prices affect demand in Oman and UK government departments reassess spending priorities. Given the firm's private placement debt is denominated in US dollars, a weak pound also affects net borrowing.

It's proving quite the value trap, trading on 7 times forward earnings and a prospective dividend yield of over 7%. It implies traders think the payout is in danger, not out of the question given a sizeable pension deficit.

We said recently that technical support at 240-245p must hold. It has, so far.

Paypoint is struggling, too, after analysts at Barclays downgraded the bill payment services firm to 'underweight' from 'equal-weight'.

They also took 80p off the price target, down to 950p, arguing that the valuation is not supported by growth prospects.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.