Surging retail stocks inspired a rebound on the London market after investors cheered a stellar festive performance from Next.
The FTSE 100 Index closed up 23.01 points to 7,671.11, bringing the market within 16.6 points of securing a fresh all-time high.
Next was the biggest riser, lifting more than 6% or 300p to 4,800p, after the fashion chain posted a surprise festive sales rise and upgraded its profit forecast.
The high street bellwether said full-price sales in the 54 days to December 24 increased 1.5%, ahead of expectations, with part of the improvement down to much colder weather leading up to Christmas.
The group saw online sales jump 13.6% in the period, helping mitigate a 6.1% decline in high street sales.
As a result, Next has increased its full-year profit guidance by £8 million to £725 million, although the figure is still a long way off last year’s £790.2 million.
The outcome helped boost the retailer’s rivals, with Primark-owner Associated British Foods climbing 58p to 2,837p and Marks & Spencer up 4.4p to 320.5p.
Across Europe, Germany’s Dax and the Cac 40 in France both rose by 0.8%.
On the currency markets, the pound was enduring a tough session after a gloomy update from the UK construction industry and rebound from the US dollar.
Sterling was 0.5% lower versus the greenback at 1.352, with construction output unexpectedly falling in December as commercial building and civil engineering work continued to drag on the industry.
The Markit/CIPS UK Construction purchasing managers’ index (PMI) showed a reading of 52.2 in December, down from 53.1 in November and below economists’ forecasts of 53.1. A reading above 50 indicates growth.
The UK currency was also 0.2% lower against the euro at 1.123.
In contrast, the price of oil hit a fresh two-and-a-half-year high as traders began pricing in a potential supply hit from political protests in Iran.
David Madden, market analyst at CMC Markets UK, said: “(Iran) is a major oil producer and marches from anti-government and pro-government sides has rattled the energy markets.
“Whenever the mood escalates in that region, dealers usually have the default view that supply could be impacted, and scramble to get long.”
Brent crude soared 1.7% to 67.59 US dollars a barrel, helping oil majors Royal Dutch Shell B and BP to climb 34.5p to 2,534.5p and 6.7p to 524.2p respectively.
Focusing on UK stocks, equipment rental giant Ashtead Group was in the ascendancy, rising 38p to 2,004p, after being handed a broker upgrade from Credit Suisse.
Away from the top-flight, AIM-listed Plus500 enjoyed a strong session after the online spreadbetter said it would outstrip expectations after reaping the rewards of the cryptocurrency boom.
The company saw strong volumes of contract for difference trades (CFD) in cryptocurrencies, such as Bitcoin, while new customer numbers more than doubled to 246,000 last year.
Plus500 finished more than 24% higher, or 218.5p to 1,100p, with annual revenues and profits set to come in ahead of market forecasts.
The biggest risers on the FTSE 100 were Next up 300p to 4,800p, Just Eat up 33.4p to 810.4p, Experian up 36p to 1,635.5p, and Associated British Foods up 58p to 2,837p.
The biggest fallers were Antofagasta down 25.8p to 975.2p, WPP down 33.5p to 1,303p, Fresnillo down 35p to 1,400p, and Randgold Resources down 152p to 7,294p.