The FTSE 100 Index returned to form yesterday, with the help of stronger banks and a decent performance by Chinese manufacturers.
The latest sign of a rebound in the world's second-biggest economy, following figures showing the country's factories enjoyed their strongest expansion in seven months, boosted sentiment.
The FTSE 100 Index was 38.7 points higher at 6713.2, having ended a nine-day winning streak during its previous session. It is now just 217 points away from the all-time high close, set in 1999.
Expectations that the US Federal Reserve will hold off from tightening monetary policy until next year lifted global shares and enabled the pound to gain ground on the US dollar.
On the eve of GDP figures for the third quarter, which are expected to show the UK's best performance in three years, sterling was flat against both the greenback and euro, at $1.61 and €1.17 respectively.
Banks have endured a choppy week but Lloyds was on the front foot in the wake of a decent third quarter performance from rival Santander and hopes that it will sell its Scottish Widows fund management arm to Aberdeen Asset Management for more than £400 million.
Lloyds' shares set a new five-year high of 80.1p, up 2.2p in the session, as the clean-up overseen by chief executive Antonio Horta-Osorio continues to take shape.
Royal Bank of Scotland was up 4.4p to 356.5p after Santander's 28% surge in UK profits for the third quarter offered hope for the bank's own figures next week.
Meanwhile, confirmation from Aberdeen that discussions were taking place with Lloyds over the Scottish Widows transaction ensured its shares jumped 6% or 24.8p to 450.4p.
Advertising giant WPP was among the risers after it reported stronger-than-expected underlying revenues growth of 5% for the third quarter. The figure, which beat City hopes for 4%, pushed shares up 12p to 1325p.
Engines giant Rolls-Royce also did well - up 30p to 1174p --after it announced a contract worth £22m to supply oil rig equipment to Samsung Heavy Industries of Korea.
Sports Direct International was the biggest faller after it announced founder and majority owner Mike Ashley had sold a 2.7% stake worth £106m in the FTSE 100 Index company. Shares were 27p lower at 685p.
Elsewhere in the retail sector, Debenhams was under pressure after it reported a 2.7% drop in pre-tax profits to £154m for the year to August 31. Shares fell 9% or 9.7p to 101p.
The biggest FTSE 100 risers were Shire up 235p at 2760p, Aberdeen Asset Management, Lloyds Banking Group and Fresnillo ahead 28p at 1022p.
The biggest fallers were Sports Direct International, William Hill off 10.4p at 388.6p and Marks & Spencer down 8.7p at 476.7p and Tullow Oil off 14p at 959p.
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