The FTSE 100 Index was within touching distance of the 5100 barrier last night as investors brushed off concerns about soaring oil prices.
Broker upgrades on a series of stocks helped the Footsie close 10.1 points higher at 5082.1, representing another three-year high for the index.
Silver Spoon sugar group Associated British Foods topped the bluechip risers, gaining 2 per cent or 18p to 806p, as Merrill Lynch upgraded it to "buy" from "neutral".
Pest control and hygiene firm Rentokil Initial was not far behind, rising 2p to 158.5p after a broker said restructuring options would enhance value for shareholders and potential bidders.
And British American Tobacco cheered 6p to 1066p after SG Securities reiterated its buy rating on the tobacco giant and increased its target share price to 1170p.
However, oil companies lost out as the cost of a barrel of US light crude slipped further from Monday's record high, down 22 US cents to just above $59 by the end of trading.
BP gave up 4p to stand at 586.5p while Shell retreated 4.25p to 515.5p. However, gas exploration company BG Group bucked the trend, lifting 0.75p to 456.5p. Oildependent British Airways was another beneficiary, featuring on the risers board with a 23p increase to 1360p.
The Dow Jones Industrial Average offered little momentum, standing virtually unchanged by the end of the day in London.
Morrisons was initially among the highest climbers as investors reacted positively to the appointments of three non-executive directors. The shares fell back to close a penny higher at 179p.
Among companies reporting yesterday, Alliance & Leicester recovered early losses to stand 1.5p ahead at 866.5p after giving the industry some respite from worries over bad debts by saying arrears on mortgages and other loans remained at low levels.
Investors in media group Emap welcomed news that it had agreed a £391 million deal to take over Scottish Radio Holdings. Shares in Emap were up 3p at 802.5p and SRH advanced 65.5p to 1067.5p.
Rival GCap Media - the company formed out of Classic FM owner GWR and Capital - lost more than 6 per cent of its value, down 18p to 264p, as it revealed revenues fell 14 per cent in May. Chrysalis also fell 7 per cent or 11p to 146.5p, following a similar update.
Elsewhere, engineering group WS Atkins was in the red as it posted a 31 per cent rise in annual profits but warned of a slowdown in its key rail market. The stock weakened 18p to 669p.
Photo equipment group Photo-Me International gained nearly 5 per cent or 4.75p to 103.75p after it said a growing trend for people to print out photographs from their camera phones had helped it to post profits ahead of hopes.
