London shares wrapped up a fifth consecutive session of gains today as the festive fervour showed no signs of slackening.
The FTSE 100 Index looked on course for its highest finish in more than two years at one stage, but had to settle for a rise of 10.4 points on the day to 4798.1.
The last time the index of leading shares closed above the 4800 mark was on November 18, although trading volumes were light today as many traders stayed with their families.
The “Santa rally” also helped New York where the Dow Jones Industrial Average added a further 11 points overnight to close at 10,827 and extend its winning run.
While many commentators expect positive sentiment to continue into the new year, others pointed out that substantial risks to further progress remain.
Analysts at Barclays said the global economy was still prone to rising interest rates, a wobbly US dollar, rising inflation, a volatile oil price and global political risk.
“Investors should enjoy the party while it lasts, but it is best to dance near the doors,” they said.
Financial stocks ensured a positive end to trading with Royal Bank of Scotland rising 15p to 1740p, Barclays ahead by 1.5p at 583p and Lloyds TSB up 4.5p at 472p.
Other sectors enjoying a strong finish to the week included tobacco and oil, with cigarette manufacturer Imperial Tobacco up 15p at 1434p and oil giant Shell a penny stronger at 445p.
But defence and aerospace stocks were weakened by media reports that the US was threatening to withhold military technology from UK firms because of European moves to lift the arms embargo on China.
Jet engine maker Rolls-Royce topped the losers board, down 4p at 247.75p, while BAE Systems was 0.75p cheaper at 230p.
But smaller rival Cobham managed to advance after announcing a £33 million deal to buy a specialist in aircraft emergency and safety equipment.
The move for US-based H Koch & Sons, which makes seat belts, survival kits and emergency lighting, is the latest addition to Cobham’s life support division. Shares in the FTSE 250 Index company were up 3p at 1252p.
Retailers were preparing to count their Christmas takings and investors also reassessed their holdings as they anticipated the likely winners and losers over the festive season.
On the way up were Tesco with a 2.5p gain to 319.5p and Argos owner GUS, which cheered 1.5p to 933.5p. But those heading the other direction included Dixons, off 0.75p at 149.75p, and Marks & Spencer – down 1.25p at 341.75p.
Shares in troubled support services group Jarvis also rose 21% or 3.15p to 18p after it achieved a breakthrough in its battle for survival today, agreeing a disposal worth nearly £147 million.
The highest Footsie climbers were Enterprise Inns up 19p to 794p, Capita Group adding 7.25p to 369p, Xstrata up 17.5p to 946.5p and Rexam adding 8.25p to 456.75p.
The heaviest fallers were Rolls-Royce off 4p to 247.75p, Old Mutual down 1.5p to 132.5p, Daily Mail & General Trust off 8p to 726.5p and Compass Group down 2.5p to 243.5p.