Britain's top share index surged above the 6,000-point mark on Monday, as miners such as BHP Billiton leapt higher on the first day of trading in the second quarter.
Analysts are divided over whether the FTSE 100 can climb significantly beyond current levels this year after more than two weeks of market indecision.
Some argue bid activity and corporate earnings could be about to tail off, while others believe the fundamental reasons for the FTSE's climb to five-year highs still remain and say equities are good value compared with other asset classes.
"We are positive on the market on a six to 12-month view," said Cazenove strategist Tristan Hanson.
"Very strong macro-economic data could start to become a problem for the market if people get overly concerned about interest rates but, of late, the market has been resilient to the increase in bond yields that we have seen."
The FTSE 100 share index closed 59.7 points, or 1 percent, higher at 6,024.3 points, extending earlier gains in late trading as Wall Street opened strongly.
The world's largest miner BHP Billiton jumped 6.4 percent after completing a larger-than-expected share buyback worth $1.6 billion.
Other miners such as Rio Tinto rose with the sector contributing more than 18 points to FTSE gains, helped by consolidation hopes and copper trading at record highs, dealers said.
Stock markets in Europe and the United States were buoyed after France's Alcatel agreed to buy smaller US rival Lucent Technologies, and bid speculation in the UK also showed little sign of abating.
Asia-focused bank Standard Chartered climbed 2.7 percent as talk returned that its Singaporean investor Temasek may eventually bid for the UK-based group.
"I'd be very surprised if Temasek did bid. I think it was oversold, there was a shakeout of people who'd moved onto the next bid story and we were due a bit of a bounce-back," said one trader.
Among mid-caps, Rank rose nearly 6 percent after weekly newspaper The Business said the leisure group was close to receiving a take-over offer.
Investment bank UBS raised its rating on the stock to "neutral" from "reduce".
"Following the disposal of Deluxe film, we believe Rank could indeed be more vulnerable to a bid," the bank said in a research note.
But telecoms firm Cable & Wireless fell 2.3 percent as long-running hopes of a bid began to fade, dealers said.
Back on the upside, oil and gas shares added almost 20 points to the FTSE's advance, with BP up 2 percent, as US crude oil prices traded above $67 a barrel.
Gas and oil company BG Group, which has been regularly subjected to take-over talk, rose 1.3 percent after it said first-quarter trading had exceeded analysts' expectations thanks to its liquefied natural gas business.
Drug maker GlaxoSmithKline rose 1.2 percent. It said it had received positive data from trials of a breast cancer treatment, Tykerb.
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