The potential for takeovers, share buy-backs and special dividends, plus the recent strength on Wall Street, remained the overriding influences in London's equity market yesterday.
Those positives overpowered a number of bearish factors, including the emergence of another dark cloud over Asian stock markets and a gloomy British interest rate outlook.
There was also a whisper in the market about the possibility of an early referendum on European economic and monetary union, although that was mostly dismissed.
"Although no one really knows how long it will last, confidence in London is slowly being rebuilt," said one dealer, adding that much of the buying interest in London came from the US.
Ironically, Wall Street provided no help for London at the opening yesterday slipping back sharply on profit-taking. The FTSE 100 index settled 58.9 higher at 5,165.8, having hit a session high of 5,167.9, up 61, just before the close.
Second-liners and smaller stocks, which have tended to outperform the leaders over recent days, were left in their wake yesterday. The FTSE Mid-250 was weakened by the preponderance of retail and engineering stocks in the index.
Both sectors suffered from specific bearish news, in the case of the retailers from the continuing steady stream of disappointing Christmas trading updates.
Those featuring prominently in the worst performance tables yesterday included Dixons, still suffering the effects of its poorly-received update issued on Wednesday, House of Fraser, Sears and Laura Ashley.
The problems for the engineers stemmed from increasing concerns about actual and potential lost orders from Asian customers as a direct result of the financial turmoil engulfing the region.
The fall in the FTSE SmallCap came after a sequence of profit warnings from companies such as Portmeirion, La Senza and Global Group. At the close, the FTSE Mid-250 had lost 7.0 at 4,816.3, while the SmallCap was 0.1 off at 2,350.0.
Early on, the market struggled to resist the demoralising performances from the important Asian markets, specifically Hong Kong, which dropped around 7 per cent.
Adding to the downside pressures were Wednesday's economic data on rising average earnings and falling unemployment, which were seen as pointing to further increases in British interest rates, possibly as soon as next month. However, with US cash coming into the market and said to be chasing the financials and oils, sentiment quickly revived, propelling the leaders forward.
Hotel stocks moved into the limelight after a warmly received trading update from Stakis.
Argos fell 33p to 505p on fears that today's trading statement will confirm concern over its Christmas sales.
Ferry operator P&O said its Princess Cruises line increased its yearly business although traffic fell in Britain under pressure from the Channel Tunnel. It buoyed 6p to 700p.
Traders were relieved to see Schroders act on the losses being made by its Asia-Pacific equity securities business. It is scaling back the operation and axing 220 jobs.
The company rose 23p to £18.70.
British Airways' joint venture with Polish airline LOT failed to make its shares take off as it stalled and fell 1p to 554p.
Shares in rail companies hit the buffers following a scathing report from the Rail Franchising Director.
Turnover in equities kept up the recent good pace, eventually reaching 919.5 million shares by late afternoon. That figure was boosted by the conclusion of GEC's share buy-back operation.
