SURGING retail stocks inspired a rebound on the London market after investors cheered a stellar festive performance from Next.
The FTSE 100 Index closed up 23.01 points to 7,671.11, bringing the market within 16.6 points of securing a fresh all-time high.
Next was the biggest riser, lifting more than six per cent or 300p to 4,800p, after the fashion chain posted a surprise festive sales rise and upgraded its profit forecast.
The high street bellwether said full-price sales in the 54 days to December 24 increased 1.5 per cent, ahead of expectations, with part of the improvement down to much colder weather leading up to Christmas.
The group saw online sales jump 13.6 per cent in the period, helping mitigate a 6.1 per cent decline in high street sales.
As a result, Next has increased its full-year profit guidance by £8 million to £725m, although the figure is still a long way off last year's £790.2m.
The outcome helped boost the retailer's rivals, with Primark-owner Associated British Foods climbing 58p to 2,837p and Marks & Spencer up 4.4p to 320.5p.
Across Europe, Germany's Dax and the Cac 40 in France both rose by 0.8 per cent.
On the currency markets, the pound was enduring a tough session after a gloomy update from the UK construction industry and rebound from the US dollar.
Sterling was 0.5 per cent lower versus the greenback at 1.352, with construction output unexpectedly falling in December as commercial building and civil engineering work continued to drag on the industry.
The Markit/CIPS UK Construction purchasing managers' index (PMI) showed a reading of 52.2 in December, down from 53.1 in November and below economists' forecasts of 53.1. A reading above 50 indicates growth.
The UK currency was also 0.2 per cent lower against the euro at 1.123.
In contrast, the price of oil hit a fresh two-and-a-half-year high as traders began pricing in a potential supply hit from political protests in Iran.
David Madden, market analyst at CMC Markets UK, said: "(Iran) is a major oil producer and marches from anti-government and pro-government sides has rattled the energy markets.
"Whenever the mood escalates in that region, dealers usually have the default view that supply could be impacted, and scramble to get long."
Brent crude soared 1.7 per cent to $67.59 a barrel, helping oil majors Royal Dutch Shell B and BP to climb 34.5p to 2,534.5p and 6.7p to 524.2p respectively.
Focusing on UK stocks, equipment rental giant Ashtead Group was in the ascendancy, rising 38p to 2,004p, after being handed a broker upgrade from Credit Suisse.
Away from the top-flight, AIM-listed Plus500 enjoyed a strong session after the online spreadbetter said it would outstrip expectations after reaping the rewards of the cryptocurrency boom.
The company saw strong volumes of contract for difference trades (CFD) in cryptocurrencies, such as Bitcoin, while new customer numbers more than doubled to 246,000 last year.
Plus500 finished more than 24 per cent higher, or 218.5p to 1,100p, with annual revenues and profits set to come in ahead of market forecasts.
The biggest risers on the FTSE 100 were Next up 300p to 4,800p, Just Eat up 33.4p to 810.4p, Experian up 36p to 1,635.5p, and Associated British Foods up 58p to 2,837p.
The biggest fallers were Antofagasta down 25.8p to 975.2p, WPP down 33.5p to 1,303p, Fresnillo down 35p to 1,400p, and Randgold Resources down 152p to 7,294p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here