The Footsie, which started life on 3 January 1984 at a base level of 1,000, added 12.76 points to close at 6,730.67.
David Madden, market analyst at IG, said: “The retail sector has dominated the market, with Next setting the pace by climbing 10 per cent after upping its full-year profit target for the second time in five months.”
Shares in Next jumped 555p to 6,085p after its update on Christmas trading proved better than analysts had expected. Traders were also shopping for Marks & Spencer amid growing evidence that retailers enjoyed a good run over the key festive period this year. Its shares were almost 4 per cent higher at 444p.
British housebuilders also advanced following news that UK mortgage approvals had surged to their highest level in almost six years. Persimmon added 3p at 1,259p in the top tier, while Taylor Wimpey advanced 1.3p to 114.2p and Redrow gained 7.3p at 326p in the FTSE 250.
Investors in financial firms were encouraged by comments from Barclays Capital, which believes that the bullish outlook for equities in 2014 should translate to inflows for UK wealth managers. Asset manager Schroders was 31p higher at 2,636p, while Hargreaves Lansdown was better off to the tune of 36p, at 1,441.
However Aberdeen Asset Management missed out on the cheer, with shares slipping 1.7p at 488.3p.
The market reacted positively to news that dry cleaning and textile rental specialist Johnson Service was having a change at the top. Executive chairman John Talbot is handing over the reins to Chris Sander, who has been with the group since 1984. With the firm also posting an “in-line” update, the shares added 3.3 per cent, at 55p.