A broad-based advance has seen shares rise for an eighth straight session to take the FTSE 100 index to a 17-month peak, following a Wall Street rally that saw US stocks hit year highs.
In the mid-cap arena, chip designer ARM Holdings ARM.L was up 3.1 per cent after information technology research company IDC raised its forecast for global semiconductor sales growth to 18 per cent in 2004 from 16 per cent previously.
The FTSE 100 .FTSE rose 11.9 points to 4,469.4 by 10:12 a.m. today just off a session peak of 4,476.3 points, its best intraday level since July 10, 2002.
Three out of every four blue-chip shares gained, but with the FTSE now up 3 per cent over the past seven sessions, dealers said a pause was on the cards.
"How much it carries on into the New Year is a big debating point. We're looking very overbought at the moment and that makes this market vulnerable, not to a break down but at least to some consolidation," one London-based trader said.
Tuesday's move was largely inspired by Wall Street, where investors bet on an upbeat start to next year and pushed all three major market gauges to their highest closing levels of 2003. New York's Dow Jones .DJI industrial average ended up 125 points or 1.2 per cent at 10,450.