Encouraging signs from China's powerhouse economy combined with more optimism over the UK's fledgling recovery to send the London market higher.

The FTSE 100 Index shrugged off heavy losses on Wall Street, where the Dow Jones Industrial Average was pushed down by disappointing July US retail sales numbers reflecting a slow start to the back-to-school shopping season.

But London's top tier advanced 0.8% or 53.7 points to 6583.4 amid hopes of an end to China's slowdown. Data showed a 9.7% rise in Chinese factory output in July, stabilising inflation and a 13.2% jump in retail sales - adding to Thursday's surprise bounce in trade figures.

Official trade figures for the UK buoyed sentiment further, with record levels of exports helping narrow the trade deficit on goods to a better-than-expected £8.1 billion in June from £8.7bn the previous month.

Data also showed surging housebuilding helped breathe life into the UK's struggling construction sector, which saw a 1.4% rise in second-quarter output.

Sterling dipped slightly against the dollar to 1.55 but gained marginally on the euro to 1.16.

Miners dominated the FTSE 100 risers board once again, led by silver miner Fresnillo up 8.2% or 78p to 1035p on expectations for a boost in demand from the rosier Chinese outlook. Chilean copper miner Antofagasta followed with a 7.5% or 65.5p gain to 942p.

Tesco was also in the spotlight as it revealed talks with China's largest retailer to merge their operations in the country.

The tie-up with CR Vanguard - owned by state-controlled China Resources Enterprise - would create a business with more than 3000 stores and combined sales of around £10bn.

But the deal leaves a question mark over the future of the Tesco brand in China and would bring an end to the group's go-it-alone strategy in one of the world's fastest-growing retail markets. Tesco's shares rose 1.6% or 5.9p to 375p as analysts at Barclays said the merger would see Tesco become less visible in China, but would give it a "much better market position and credibility". Insurer Standard Life followed Thursday's 3% fall with another slide as it continued to suffer after half-year figures came up short of expectations. Shares were down another 3.3% or 12.5p to 365p. Rivals joined it in the red, with Prudential off 4p to 1184p and Legal & General 1.5p lower at 196.8p.

Balfour Beatty traded broadly flat on the second tier after announcing the sale of its facilities management arm to GDF Suez for £190 million to focus on major infrastructure projects.

The business, known as Balfour Beatty WorkPlace, employs more than 9000 staff and has big contracts in the UK with organisations and companies including the Department for Work and Pensions, Royal Mail and the NHS. Shares were 0.1p lower at 243.8p.