The fashion group climbed 10% after it said full-year earnings could now rise by as much as 12.6% and that sparked further gains among rivals such as Marks & Spencer and Primark parent Associated British Foods.
The retail rally helped prop up the wider FTSE 100 Index, which initially fell into the red after succumbing to profit-taking and fears over data showing slowing factory activity in China, before later recovering to close 12.8 points up at 6730.7.
France's Cac 40 and Germany's Dax were also up as they rebounded from heavy falls in the previous session. It came after markets suffered a lacklustre start to 2014, with a plunge in the FTSE 100 marking the first time since 2008 that new year trading had kicked off in the red.
However, Berkeley Futures associate director Richard Griffiths expects the index to grow beyond 7000 points this year.
On currency markets, sterling was flat at 1.64 US dollars and 1.21 euros.
In London, Next was the biggest riser on the FTSE 100, up 555p to 6085p, after its buoyant update ensured it joined John Lewis and House of Fraser on the list of Christmas retail winners so far.
Sales across Next stores leapt 7.7% higher between November 1 and Christmas Eve, while revenues surged by 21% in the Next Directory catalogue and online division.
M&S followed it on the risers board with a 16.7p gain to 444p, as investors were more hopeful over its trading update next week after the flurry of stellar sales updates.
It had been hit hard earlier in the week after rival Debenhams issued a major profits warning following disappointing Christmas sales. Primark parent Associated British Foods was also making gains, up 36p to 2524p, while in the FTSE 250, Currys and PC World group Dixons Retail rose 5%, or 2.5p, to 50p.
Debenhams also continued to claw back some of Tuesday's heavy falls and was up 4%, or 3p, to 78.1p.
Housebuilders were likewise making advances after Nationwide data revealed prices surged by 8.4% over 2013, with property values rising by 1.4% month-on-month in December.
Crest Nicholson rose nearly 3%, or 9.9p, to 380p, while Bovis Homes was up 19.5p to 821p and Redrow climbed 10.5p to 457.5p.
The biggest FTSE 100 risers were Next, Marks & Spencer, CRH, up 41p to 1580p, and Hargreaves Lansdown, up 36p to 1441p.
The biggest FTSE 100 fallers were Coca-Cola HBC, down 36p to 1725p, Mondi, down 19p to 1026p, Pearson, down 22p to 1318p and Glencore Xstrata, down 3p to 307.5p.