The FTSE 100 Index edged towards the 5600 mark today in the last full trading session ahead of Christmas.
BAE Systems led the London market to a new four-year high while housebuilders were also in focus.
The top flight closed the day 9.6 points higher at 5597 as it gained further momentum from a strong start across the Atlantic on Wall Street.
BAE led the charge at home, lifting 4% as investors continued to welcome yesterday’s agreement between the UK and Saudi Arabia which is set to land the company its biggest deal in 20 years.
Shares were up 15p to 385p – a three-and-a-half-year high – as the prospect of a multi-billion pound deal to supply the Royal Saudi Air Force with a fleet of Eurofighters loomed large.
Hilton Group was also in positive territory as investors cheered news that it had received expressions of interest in Ladbrokes.
Confirmation that firms were considering a £3 billion punt on the betting shop chain sent Hilton shares 2% higher, up 8p to 365p.
Mining stock Kazakhmys provided further buoyancy as it continued to enjoy its first month in the FTSE 100 Index. Shares rose 16p to 735.5p, but there was less good news for rival Xstrata which topped the blue chip fallers board.
Investors banked profits made in yesterday’s 26p rise and sent the stock down 34p to 1338p.
BSkyB shares fell 4.5p to 497p amid talk of a shaky future for TV football rights after German firm Premiere lost its contract on the continent.
There were mixed fortunes in the oil sector as Royal Dutch Shell’s rise of 21p to 1871p was countered by a 2.5p fall for BP which sank to 622.5p. Cairn Energy was far better off as it continued its remarkable run in 2005 to lift 27p to 1928p.
Shares in Boots drifted half-a-penny lower to 609.5p after a study from market research firm Verdict warned its share of the health and beauty market tumbled to its lowest level for eight years.
Other retailers lost gains prompted by upbeat comments about festive trading from the CBI yesterday. B&Q owner Kingfisher weakened 1p to 236.5p, while supermarket giant Tesco lost 1.75p to 329.5p.
The housebuilding sector was very much in focus today, with top flight newcomer Persimmon among the best performers buoyed by prospects of an interest cut in early 2006.
Shares rose 19p to 1251p, while the second tier risers board was dominated by its smaller rivals.
An upbeat trading statement from Wilson Bowden lifted its shares 5% or 76p to 1466p, while McCarthy & Stone was up 6% or 37p to 657p.
They were followed north by Redrow – up 25.75p to 539p – Bovis Homes – adding 34.5p to 776p – and Taylor Woodrow, which jumped 12.25p to 374.5p.
The FTSE 100 Index’s biggest risers were BAE Systems up 15p to 385p, Hilton Group up 8p to 365p, Kazakhmys ahead 16p at 735.5p and PartyGaming up 2.5p to 138p.
The heaviest fallers were Xstrata down 34p to 1338p, Sage Group off 3p to 253.5p, Man Group down 22p at 1906p and Tate & Lyle 6p weaker at 560p.