The top flight index surged through the 6200 mark after the US government was given another three months to pay its bills by the House of Representatives, which voted to suspend the US debt ceiling.
A raft of better than expected purchasing managers' manufacturing figures, including in the US, also contributed to the bullish mood, helping the FTSE 100 Index close up 67.3 to 6264.9 – a new landmark since May 2008. The Dow Jones Industrial Average opened higher after figures showed the number of Americans seeking unemployment benefit last week fell to its lowest level in five years.
The pound was down against the US dollar and the euro at 1.57 and 1.18 respectively ahead of figures tomorrow which are expected to show the UK economy contracted in the final three months of 2012.
The rise in the London market came despite disappointing sales figures from Apple and its failure to lift quarterly earnings by double-digits for the first time in several years.
But ARM Holdings, whose chip designs are found in many of Apple's products, still gained 2%, up 18p to 867.5.
Among stocks doing well, Vodafone was up by 3% or 5.2p to 168.7p and advertising and marketing group WPP improved 19.5p to 976.5p.
Low-cost airline easyJet took the plaudits in the FTSE 250 Index as better-than-expected figures for the Christmas quarter led it to forecast a much reduced first half loss Shares were up 43.5p to 898.5p, or 5%.
It was joined on the way up by FirstGroup after the Aberdeen-based transport operator hinted at signs of progress in its bus division. Like-for-like passenger revenues growth of 2.1% for the quarter to the December 31 was slower than the 2.6% reported for the previous half, but it said initiatives taken to improve performance were working.
It will also consider a resumption of dividend growth in May after holding last autumn's half-year pay-out due to uncertainty caused by the Government's rail franchising review. Shares were 11.8p higher at 203.8p.
Another stock on the front foot was Carphone Warehouse after it reported a 16% jump in UK sales as consumers snapped up the latest smartphones and tablet computers.
Even though the retailer admitted the hike had come at the expense of profit margins after launching a raft of cut price deals and bundle offers in the quarter to December 31, shares improved 11p to 230p.