A rally by miners and energy stocks, spurred by firmer commodity prices, helped Britain's top share index extend gains by midday on Monday as it rose above 5,200 points for the first time since September 2008.
By 1108 GMT, the FTSE 100 index .FTSE was up 68.75 points, or 1.3 percent, at 5,230.62, having hit a fresh high for 2009 of 5,231.18.
There's still some general optimism that the U.S. third-quarter results season could still prove (to be) at the higher end of expectations, and I think (that has) helped the market off to a reasonable start, said Keith Bowman, analyst at Hargreaves Lansdown.
U.S. companies reporting this week include Intel Corp (INTC.O) on Tuesday, JPMorgan Chase & Co. (JPM.N) on Wednesday, Citigroup Inc. (C.N) and Goldman Sachs (GS.N) on Thursday, and Bank of America Corp (BAC.N) and General Electric (GE.N) on Friday.
Energy stocks added the most points to the index as crude prices CLc1 rose above $73 a barrel, with (BP.L), Royal Dutch Shell (RDSa.L) and Tullow Oil (TLW.L) up 1.3 to 1.6 percent.
BG Group (BG.L), up 1.4 percent, was also helped by a Sunday Times report which said the firm has received an unsolicited bid for most of its 1.5 billion pound power generation business and could announce a sale shortly.
Against a background of firmer metals prices, miners were in favour. Fresnillo (FRES.L), Kazakhmys (KAZ.L), Eurasian Natural Resources (ENRC.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) added between 1.1 and 2.3 percent.
Heavyweight Vodafone was among the top individual blue chip gainers, up nearly 3 percent, rallying after a recent sell-off precipitated by worries over a price war in the Indian mobile telecoms market.
Burberry (BRBY.L) was another healthy riser, climbing 2.7 percent ahead of second-quarter earnings from the luxury clothing brand on Oct. 14, with Deutsche Bank saying the firm is well positioned for 2010 as it lifted its target price.
Banks were mixed awaiting the latest results from their U.S. peers this week, with the overall sector positive thanks to gains in heavyweight HSBC (HSBA.L), up 0.8 percent, and Standard Chartered (STAN.L), which put on 1.9 percent.
Lloyds Banking Group (LLOY.L) shed 1.7 percent on reports the lender has lined up a syndicate of investment banks to underwrite an 11 billion pound rights issue, the Sunday Times reported, with UBS (UBSN.VX) and Bank of America Merrill Lynch (BAC.N) to act as lead underwriters.
Barclays (BARC.L) was down 0.9 percent after the Financial Times reported the lender is planning to spin off a 4 billion pound portfolio of complex credit assets as it presses ahead with a process to clean up its balance sheet.
Royal Bank of Scotland (RBS.L) was flat. Sources close to the lender said the bank's advisors, Morgan Stanley and Hoare Govett, have suggested a public listing of car insurer Churchill in a move which could raise billions of pounds, the Independent on Sunday said.
As a sector, utilities were among the only blue-chip fallers, with Centrica (CNA.L) off 0.4 percent and National Grid (NG.L) 0.3 percent weaker.
Prime Minister Gordon Brown gave his backing on Monday to the central bank's programme of pumping money into the economy to help pull Britain out of recession.
British interest rates are expected to stay at 0.5 percent until 2011 and will not rise to 2 percent until 2014, the Centre for Economics and Business Research (CEBR) said on Monday.
U.S. stock indices looked set to build on Friday's gains although trading could be thin, with bond markets and government departments closed for the Columbus Day federal holiday.