Argos owner Home Retail Group led a strong session for retail stocks after better-than-expected festive trading figures from a raft of firms.
Home Retail shares soared 12% in the FTSE 250 index, while investors also cheered strong Christmas performances from budget fashion chain Primark and Currys and PC World parent Dixons Retail.
Positive housing and jobs data in the US helped the wider FTSE 100 Index hit a fresh four-and-a-half-year high, up 28.4 points to 6132.4.
The more cheery economic figures offset disappointing bank earnings from Wall Street giants Citigroup and Bank of America, with the Dow Jones Industrial Average also 0.5% higher in early session trading.
In currency news, the pound weakened to a nine-month low against the euro - to 1.197 euros - amid ongoing concerns over Britain’s membership of the EU and as the single currency enjoyed a strong run. Sterling fell to just below $1.60.
Home Retail was the biggest gainer among retail stocks after it revealed like-for-like sales at Argos rose 2.7% in the 18 weeks to January amid a boom in demand for tablet computers.
The biggest FTSE 100 risers were International Consolidated Airlines up 8.8p to 211.8p, Associated British Foods ahead 50p to 1606p, ITV 3.5p higher at 113.6p and Aggreko up 48p to 1818p.
The biggest FTSE 100 fallers were Aberdeen Asset Management down 6.7p to 385p, National Grid off 10p to 682.5p, Petrofac 22p lower at 1673p and Polymetal International down 13p to 1084p.