Britain's FTSE 100 index scored its highest close in four years on Thursday as investors flocked to oil shares and miners following positive comments from brokers and a rise in commodity prices.
Consumer stocks, however, were left behind with Europe's top home improvements retailer Kingfisher down 3.9 percent after it announced a 23 percent slide in first-half profit and said markets were the toughest it had faced in years.
Clothing retailer Next had a similar story to tell, announcing its worst like-for-like sales in a decade as flat UK retail sales figures increased the gloom over the sector. Next shares finished down 3.2 percent.
The FTSE 100 closed 36.1 points up at 5,383.5, its highest close since September 2001, though off a session high of 5,387.1, reached after benign US inflation data was interpreted by some investors as taking pressure off the Federal Reserve to raise interest rates.
"If you look at what is up and what is down in the UK the consumer stocks are being hit and the industrial or resource stocks are doing better," said Akber Khan, part of Deutsche Bank's European Equity Focus team.
"The next Federal Reserve meeting is on September 20 and we'll be looking very carefully to see if they soften the language at all post Hurricane Katrina," he added. He was referring to the wording of the statement accompanying US interest rate decisions which can give clues to future rate intentions.
Commodity stocks contributed pretty much all of the gains in the FTSE 100 as oil prices pushed back above $65 a barrel after a brief dip towards $63 and helped by upbeat notes on several stocks from investment back UBS, including oil major BP and fellow energy giant Royal Dutch Shell.
"BP and Shell account for about 25 points of the gain between them, while the miners got the benefits of that big upgrade by UBS. Other than that there's not too much to get your teeth into," said one trader.
Royal Dutch Shell put on 3 percent while BP rose 2.3 percent.
Miners Rio Tinto, up 3.1 percent, and BHP Billiton, up 2.3 percent also stood out.
"We have upgraded both our oil and iron ore price forecasts for the next three years," UBS analyst Paul Galloway said in a note, adding that both Rio and BHP are trading at a 30 percent discount to the market.
Take-over activity remained on the boil with industrial gases group BOC, said recently to be a potential target of German chemicals group BASF, up 3.7 percent.
Leisure group Whitbread finished 1.2 percent higher after broker Panmure Gordon said in a research note the sale of its non-hotel businesses could enhance earnings by almost 30 percent.
Wireless technology company CSR stood out on the mid-cap index with a 16 percent surge after predicting its third-quarter profits would beat forecasts because of higher shipments of mobile phones and handsets.
Temporary power supplier Aggreko also scored a double-digit gain, rising 12 percent after it raised its profit forecast, partly due to an increase in work following Hurricane Katrina.
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