The FTSE 100 Index closed at the 5000 barrier for the first time since 2002 today as Dulux owner ICI added the gloss to a positive day for blue-chip stocks.
Relief that annual profits of ICI had held up in the wake of record rises in oil prices during the final three months of 2004 made its shares the top riser, up 12% or 29p to 275p.
Investors also welcomed the decision by the Bank of England to keep interest rates on hold as the Footsie closed 9.6 points higher at 5000.
While business lobby groups cheered the decision to keep the cost of borrowing at 4.75%, analysts were divided over the future direction of rates.
Some said slowing consumer spending and house prices could spark a rate cut before the election, but others said they believed there was still one more rate hike to come.
News that the US trade gap narrowed in December ensured that the Dow Jones Industrial Average travelled in the black, up 40 points in early trading.
The drugs sector captured the attention of investors in London as a safety scare engulfed the best-selling drug of Shire Pharmaceuticals, while rival GlaxoSmithKline posted annual results.
Shares in Shire topped the Footsie fallers with a 10% or 64.5p drop to 577.5p after Canadian regulators ordered the suspension of sales of its Adderall XR drug for attention deficit hyperactivity disorder.
In contrast, GlaxoSmithKline added 4p to 1236p after profits of £6.12bn (€8.9bn) met expectations despite the impact of £1.5bn (€2.2bn) in lost sales due to the appearance on the market of cheaper copies of two of its key drugs.
Banking giant Barclays and jet engine maker Rolls-Royce ended lower as investors reacted negatively to their annual results.
Barclays shed 0.5p to 593.5p as concerns over the need to make more provisions this year overshadowed annual profits of £4.6bn (€6.7bn), which were in line with expectations.
Shares in jet engine maker Rolls-Royce lost 7p to 264.5p as investors focused on the lack of a dividend increase and a vague outlook, rather than the group’s rising profits and record orders.
After rising in early trading, consumer products giant Unilever weakened 2p to 514p despite announcing the abolition of its dual-chairman structure and the start of a share buyback programme.
But telecoms group BT was unchanged at 206p after saying strong broadband take-up had helped it lift revenues and profits.
Lastminute.com jumped nearly 6% or 6.25p to 113p after reporting first quarter results ahead of hopes.
Another company in the leisure sector, De Vere Group, advanced more than 12% or 62.5p to 563.25p after selling its Belfry golf and hotel complex at an attractive price.
The biggest Footsie risers today were ICI up 29p to 275p, Hilton Group adding 10.25p to 318.25p, Corus Group up 1.5p to 57.5p and Rentokil Initial adding 3.75p to 159.25p.
The heaviest fallers were Shire Pharmaceuticals down 64.5p to 577.5p, Rolls-Royce falling 7p to 264.5p, Exel down 15p to 835.5p and Carnival falling 53p to 3119p.