May's gains make it three in a row

London shares recorded their third successive month of gains as May ended on an upbeat note today.

Despite rising job losses and plenty of grim corporate data, many investors believe the worst of the financial crisis is over and believe they can see the fabled green shoots of recovery.

The FTSE 100 index of leading shares was up 174 points over the course of May, a 4.1% rise that followed increases of 2.5% in March and 8.1% in April.

At the end of May's final trading session the index reached 4417.94, having added 30.40 points today, with sentiment boosted in part by a surprise rise in house prices.

Miners figured prominently among the day's top gainers, as they benefited from strengthening metals prices.

Platinum specialist Lonmin, up 111p to £14.28, led the way, while Eurasian Natural Resources Corporation added 35.5p to 649p and Xstrata was 34.5p better at 684p.

Energy groups also prospered as the oil price continued to rise, with BG gaining 49p to £11.28.

Housebuilders were lifted by the latest property market survey from Nationwide that showed house prices rose 1.2% in May.

Taylor Wimpey was the FTSE 250's biggest gainer, up more than 9% or 2.75p at 32p.

Fellow midcaps Persimmon, Redrow and Bellway also recorded increases: Persimmon was up 18.5p to 364p, Redrow gained 5.75p to 195.75p, while Bellway was 9.5p better at 645.5p.

However, Barratt Developments dropped 4p to 158.5p and Bovis was down 1p to 389p.

Panmure analysts Rachael Waring and Mark Hughes – who have Redrow, Bellway and Barratt on sell ratings – sounded a warning note.

"In our view, in the face of little positive economic data, prices are likely to return to a downward trend over the coming months," they wrote in a note.

"We therefore maintain our belief that conditions will deteriorate over the summer months for all UK housebuilders.

"Our sector stance remains Negative."

Travel group Thomas Cook fell 7.5p to 221.75p, as hopes receded that its troubled German parent company Arcandor would receive state aid.

German ministers indicated earlier in the week that the government would consider guaranteeing €650m in loans to Arcandor but reports today suggested that the group would not meet requirements for state aid.

Analysts believe the uncertainty around Arcandor and the possibility that it might be forced to sell its 52.8% stake in Thomas Cook have depressed the latter's share price.

ITV continued its positive run on hopes that its advertising regime will become more favourable.

The Office of Fair Trading has advised the Competition Commission to consider updating the contract rights renewal system that pegs the broadcaster's advertising rates to viewing figures.

With ratings in decline, the regime has been a significant drag on ITV in the five years since it came into effect.

Shares closed up 1.75p to 38.75p, a 38% rise over the past three days.

However, Investec analyst Steve Liechti urged investors to "be careful" despite the recent positive trend in the share price and maintained a sell rating.

"Investors can make up their own minds on recovery - we are cautiously optimistic but probably more cautious than optimistic currently," he wrote in a note.

BSkyB, which has a 17.9% stake in ITV, slipped 10.5p to 442p amid reports that it has bid as much as £160m for Virgin Media's television channels.

The Suffolk-based brewer Greene King slipped 22p to 438p as it revealed that 93% of shareholders had agreed to participate in a rights issue at 270p a share.