Around £10.8 billion was added to the value of UK blue chips yesterday as London's FTSE-100 index leapt to its highest level for nearly two years.
Encouraging US job figures helped overshadow fears over the UK economy, sending the top flight another 42.50 points higher to 6089.84 – a level not seen since February 2011.
The Dow Jones industrial average on Wall Street also edged higher in early trade after a report showed US employers added 155,000 jobs last month, while hiring was stronger in November than first thought.
Investors were cheered by the news of solid US jobs growth, even though it failed to bring the rate of US unemployment down from 7.8%.
The Footsie smashed through the 6000-point barrier on Tuesday after America secured a last-minute deal to avoid devastating fiscal cliff measures of tax hikes and spending cuts.
Yesterday's gains came despite early session falls after minutes of the most recent Federal Reserve meeting showed policymakers were divided over how long the central bank should keep buying bonds to support the economy.
The UK economic climate was also in the spotlight after figures suggested the powerhouse ser-vices sector shrank last month for the first time in two years.
The Markit/CIPS purchasing managers' index (PMI) survey showed a reading of 48.9 in December, down from 50.2 in November and below the 50 mark separating growth from contraction.
The pound dropped on the services sector gloom, hit also by a stronger dollar on expectations for less bond buying in the US. Sterling fell to 1.60 dollars and just below 1.23 euros.
The stagnant economic picture did little for confidence in mining stocks as Randgold Resources dropped 255p to 5975p and silver miner Fresnillo slipped 75p to 1810p. But gains from blue-chip heavyweights Vodafone, BP and GlaxoSmith-Kline helped the top flight.
BP was top of the Footsie risers' board, up 11.8p to 453.5p, after the owner of the Deep-water Horizon drilling rig that exploded in 2010 killing 11 people shared some of the responsibility for the disaster.
The oil giant agreed a £2.8bn settlement with US authorities over criminal charges for the disaster and Transocean said it would pay $1.4bn to settle all civil and criminal claims.
Meanwhile, retailers were on the back foot ahead of a busy week of Christmas updates.
Marks & Spencer fell 12p to 376.4p, while Sainsbury's and Tesco were down 2.8p to 333.8p and 0.6p to 349.5p respectively.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article