The FTSE 100 Index secured its highest finish for three months last night as investors ignored claims of a consumer-led recession in the retail sector.
With only miners and a clutch of other blue-chips in the red, the Footsie powered 44.8 points higher to 5025.2 by the end of the session.
Much of the bullish sentiment followed a positive start to trading on Wall Street where the Dow Jones moved more than 100 points higher after the opening bell.
Investors welcomed the news that GM was to cut its US workforce by 25,000 as it steps up its recovery plan, while upbeat comments about the US economy from Fed chairman Alan Greenspan were also applauded.
In the UK, few retailers suffered in the light of the warning of a "consumer-led recession" from the British Retail Consortium. Next rose 5p to 1472p and Boots advanced 7.5p to 592.5p even though the BRC survey found like-for-like high street sales fell 2.4 per cent last month.
Second-tier stock Woolworths rose 1.25p to 35.75p despite highlighting the poor trading conditions with a 4.4 per cent sales fall. It also said it would not be returning cash to shareholders.
Back in the top flight, Diageo was the highest blue-chip riser after news that Pernod Ricard's proposed acquisition of Allied Domecq would allow it to cherry-pick some key brands.
Its shares advanced three per cent, up 24p to 811.5p, after Monday's announcement that it may buy most of Allied's Montana wines if the Pernod bid was successful. Diageo will also pay Pernod £200 million for Irish whiskey brand Bushmills under the plans.
Back in the top flight, mobile phone operators were in positive territory after regulator Ofcom paved the way for firms to maintain current charges for calls between different firms.
O2 led the way with a gain of nearly three per cent, adding 3.5p to 125.75p, while Vodafone was 2.25p higher at 138p as Ofcom spelt out its proposals.
Utility group Severn Trent lost 6.5p to 1002.5p despite saying its businesses were in "good shape" and reporting annual profits in line with market expectations.
Elsewhere, Carphone Warehouse was lifted by news of a 34 per cent hike in annual pre-tax profits to £102.1 million, sending its shares 5p higher to 171p.
Eurotunnel cheered investors as it took on the budget airlines by slashing prices on its cross-Channel routes. Its stock advanced six per cent, lifting 1.25p to 17.25p.
Highest climbers: Diageo up 24p to 811.5p, BA rising 8p to 275p, O2 up 3.5p to 125.75p and Standard Chartered adding 27.5p to 1036p.
Heaviest fallers: Xstrata losing 17p to 1001p, Tate & Lyle off 5p to 475p, United Utilities down 6p to 679p and BHP Billiton losing 5.5p to 682p.