* FTSE 100 up 1.4 percent; highest close since April 26
* Banks bounce back after last week's falls
* Commods gain as crude, metal prices gain
* British Airways top riser after September traffic numbers
By Tricia Wright
LONDON, Oct 5 (Reuters) - Stronger banking and commodity shares helped drive Britain's top share index to a more than five-month closing high on Tuesday, after encouraging U.S. economic data gave a boost to markets.
The FTSE 100 closed 79.79 points, or 1.4 percent, higher at 5,635.76, its highest closing level since April 26, after a 0.7-percent fall on Monday.
Banks were the best performing blue chips, adding 2.5 percent, as the sector rallied from falls last week on fresh European debt concerns.
The pace of growth in the U.S. services sector accelerated last month more quickly than economists had expected and hiring also picked up, according to a report from the Institute for Supply Management.
"The market always appears to be waiting for the next bit of data, but the picture that is building here, for me, is one where the recovery remains on track, albeit it's had its fair share of wobbles during August," said Paul Kavanagh, a partner at broker Killik & Co.
Strong demand was also seen for miners, up 2.7 percent, as copper hit new 26-month peaks, the euro rose against the dollar and after Japan unexpectedly lowered interest rates, raising expectations of further boosts for other major economies.
It was a similar story with energy stocks, which put on 0.8 percent, as crude prices rose, with BG Group, up 1.3 percent, the best performing integrated oil stock.
Anglo American led the miners higher, rising 4.1 percent, followed by Antofagasta, 3.7 percent firmer.
Kazakhmys did not fare so well, adding only 0.3 percent, after its chairman Vladimir Kim sold around an 11 percent stake in the company to the Kazakh National Welfare Fund, reducing his holding to 27.9 percent.
In reaction, Evolution Securities cut its rating on Kazakhmys to "reduce" from "add".
BA SOARS
British Airways was the top blue-chip riser, jumping 6.5 percent, after the airline said it carried 1.3 percent more passengers in September compared with a year before, helped by an increase in first and business-class travel, and that it expects passenger revenue to keep growing.
Good gains were also seen from TUI Travel, up 4.2 percent, after the tour operator said in a trading update that summer 2010 trading went well, while trading for winter 2010/11 had further strengthened across all sectors.
Mid-cap rival Thomas Cook Group put on 3.9 percent.
Tesco rose 0.2 percent after the retailer posted first-half results showing strong growth in Asia but a sluggish performance in its main British market.
Rival J Sainsbury, which will issue a trading update on Wednesday, added 0.1 percent.
"Third-quarter U.S earnings start off in earnest (on Thursday). (Tesco's numbers) looked very good. Certainly what hasn't disappointed through this downturn has been corporate earnings and there is some optimism going into those third-quarter numbers," Kavanagh said.
Inmarsat was the top FTSE 100 faller, losing 4 percent after U.S. hedge fund Harbinger Capital Partners said on Tuesday it sold a 14.1 percent stake in the satellite operator for around 410 million pounds. (Editing by Greg Mahlich)