LONDON (Reuters) - The FTSE 100 <.FTSE> ended over 2 percent higher on Friday as U.S. jobs data helped extend gains late in the session, with banks and mining shares leading the charge.

The blue-chip index was up 128.2 points, or 2.1 percent at 6,215.5 -- its highest close since early January.

The market will close on Monday for a public holiday.

The U.S. government said 20,000 workers were lost from non-farm payrolls in April, against expectations for a fall of 80,000 and compared with a downward revised loss of 81,000 in March.

April still marked the fourth consecutive monthly contraction in the labour market, but the numbers suggested the world's largest economy was proving more resilient than expected.

Banks were the standout sector, with Royal Bank of Scotland (LSE: 91ID.L - news) , HBOS <HBOS.L>, Lloyds TSB <LLOY.L>, Alliance & Leicester <ALLL.L> and Barclays (LSE: BARC.L - news) <BARC.L> rising between 2.4 to 6.6 percent.

In related news, private equity firm Texas Pacific Group is considering a bid for Royal Bank of Scotland's insurance arm, a source familiar with the matter said on Friday. The unit could be worth 8 billion pounds.

"You could feel the tension today before the U.S. non-farm payroll figures were released, as traders tried not to get too exposed," Ryan Kneale, an analyst at BetsForTraders.com said.

"The actual figures were much better than expected and the equities markets, which were already up 1 percent before the news, stepped up a gear and went into overdrive."

"This is great news for the market bulls, but essentially rules out any more rate easing by the Fed in the short term," he added.

Among other gainers on Friday, Rio Tinto (Frankfurt: 855018 - news) <RIO.L>, which has rejected a bid from rival BHP Billiton (LSE: BLT.L - news) <BLT.L>, climbed 4.6 percent after the company's Chairman Paul Skinner was quoted by the Sydney Morning Herald as saying that a break-up of Rio Tinto was an option to extract the best possible return for shareholders.

BHP advanced 4.8 percent, while Kazakhmys (LSE: KAZ.L - news) <KAZ.L>, Lonmin (LSE: LMI.L - news) <LMI.L>, Vedanta Resources (LSE: VED.L - news) <VED.L>, Xstrata <XTA.L> and Eurasian Natural Resources <ENRC.L> were up 3.4 to 5 percent.

Insurers were also in demand. The Financial Times said Germany's Allianz <ALVG.DE> could make a big acquisition in the UK general insurance market and was gearing up for a possible assault on UK life assurance by importing U.S.-style retirement savings products to Britain. Allianz was not immediately available for comment.

Aviva <AV.L>, Standard Life (LSE: SL.L - news) <SL.L>, Prudential <PRU.L>, Friends Provident (LSE: FP.L - news) <FP.L> and Admiral <ADML.L> were up 4.1 to 5.4 percent.

Retailers also supported the index, with Next <NXT.L> and Marks & Spencer <MKS.L> riding high on a bear squeeze, traders said.

Building materials distributor Wolseley (LSE: WOS.L - news) <WOS.L>, which earns half of its revenue in North America, rebounded 8.3 percent after a recent battering.

Among companies on the downside, British Energy (LSE: BGY.L - news) <BGY.L> lost 3.9 percent as traders began to doubt whether recent takeover speculation would result in a bidding war.

Global news and information company Thomson Reuters (TRI.TO - news) <TRI.TO> <TRIL.L> slipped 2.3 percent one day after its first earnings report as a combined company and as RBC (RBCI.PK - news) cut its price target on the stock to $46 from $47 with an "outperform" rating.

Shares in Cadbury <CBRY.L> were flat on their first day of trading as a stand-alone confectionery group.

"The (jobs) number was of course still negative but global stock markets in recent weeks appeared to have become resilient to this sort of news," said David Jones, chief market strategist at IG Index. "Which begs the question, were the falls at the beginning of the year overdone?"

"Many are starting to feel that stocks at least seem to be signalling the worst may be over... The jury is still out on this point."

(Additional reporting by Dominic Lau; editing by Rory Channing)