LONDON'S top flight index came close to breaking above the 7,000 mark as stocks rallied because of sterling weakness, after Prime Minister Theresa May vowed to kick start the Brexit process by March next year.
The FTSE 100 Index touched 6,996.43, before paring gains to rise 84.19 points to 6,983.52, as investors were handed greater clarity over when Britain will exit the EU.
The pound's weakness is boosting the sterling value of the overseas earnings of FTSE-100 companies with operations abroad.
However, the pound was waning on the currency markets, dropping to a three-year low against the euro, amid fears that Mrs May will opt for a "hard Brexit" by leaving the single market in order to control immigration.
The announcement that Britain would trigger Article 50 by the end of March 2017 also caused sterling to hover near a fresh 31-year low against the US dollar.
However, the pound momentarily pared losses after the latest PMI survey showed that output in Britain's manufacturing sector reached its highest level for more than two years in September.
The closely-watched Markit/CIPS UK Manufacturing purchasing managers' index (PMI) said output hit 55.4 last month, up from 53.4 in August, and above economist expectations of 52.1.
Rob Dobson, senior economist at IHS Markit, said: "The rebound over the past two months has been encouragingly strong, and puts the sector on course to provide a further positive contribution to GDP in the third quarter."
Sterling was down 0.9 per cent against the dollar at 1.2833 US dollars towards the end of the session, and off 0.8 per cent against the euro at 1.144 euros.
Speaking about the manufacturing PMI, Andy Scott, economist at HiFX, said: "The data post-Brexit hasn't just pointed to the economy maintaining what was a solid rate of gross domestic product (GDP) growth in the second quarter, there's evidence that in some sectors activity is strengthening, including manufacturing, which of course benefits from a weaker pound.
"If Wednesday's services PMI also improves, we may see sterling strengthen as this is the sector that most worry will be negatively impacted in the months ahead."
Across Europe, Germany's Dax was closed for German Unity Day, while the Cac 40 in France was up 0.1 per cent.
In UK stocks, oil majors were on the up as the price of Brent crude climbed above the 50 US dollars a barrel mark, after the Opec cartel said it had reached a deal last week to stabilise the market by slashing output.
Royal Dutch Shell B rose 47p to 2,044p after the oil price lifted 0.4 per cent to 50.41 US dollars a barrel. Rival BP was also up 8.4p to 458.4p.
Royal Bank of Scotland saw shares up by 0.5p at 179.3p after Reuters reported it will pay $120 million (£93.4m) to settle a Connecticut state investigation into the bank's under-writing of toxic mortgage-backed securities.
Away from the top tier. Henderson Group surged more than 16 per cent after it announced a merger with US firm Janus Capital, creating an investment titan with more than 320 billion US dollars (£247 billion) in assets under management.
The deal will see the combined entity renamed Janus Henderson Global Investors and hold a combined market capitalisation of six billion US dollars (£4.6 billion).
Shares were up 38.7p to 270.7p
The biggest risers on the FTSE 100 index were Intercontinental Hotels Group up 99p to 3,279p, Travis Perkins up 48p to 1,592p, Anglo American up 27.8p to 995.4p, London Stock Exchange up 80p to 2,880p.
The biggest fallers on the FTSE 100 index were ITV down 3.4p to 183.8p, Marks and Spencer Group down 5.1p to 326p, BT Group down 3.9p to 385.1p, Legal and General down 2.1p to 216.6p.
ends
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