Britain's top share index settled near an 11-month high on Tuesday while mid-caps rose nearly 1 percent as political uncertainty eased following the news Theresa May will be the next prime minister. Gains in large-cap property-related stocks offset weakness in defensive sectors such as telecoms and healthcare that were investor magnets in the aftermath of June's Brexit vote.
The blue chip FTSE 100 index closed at 6,680.69 points, flat in percentage terms but near its highest level since August last year.
The index has gained nearly 16 percent since its post-Brexit low on June 24 after the result came through that Britain had voted to quit the European Union, and is up more than 20 percent from its trough in February.
It is up only 11 percent in US dollar terms in that period due to the sharp fall in sterling on concerns that the Brexit vote could lead the country into recession.
The domestically-focused mid-cap index once again outperformed the more globally-focused companies of the FTSE 100.
The FTSE 250 rose 0.6 percent and is now some 3 percent shy of its pre-EU referendum levels.
British financial markets rose after it became clear on Monday that Theresa May will succeed British Prime Minister David Cameron, who announced he was stepping down after Britons voted last month to quit the European Union. May's rival Andrea Leadsom abruptly ended her leadership campaign on Monday.
"Markets are continuing to cheer the fact that at least some degree of certainty has returned concerning the UK government," said Markus Huber, trader at City of London Markets.
"Traders might be content for now that a leadership crisis in the UK has been avoided."
Companies sensitive to domestic economic and political conditions were in demand, with the FTSE real estate index touching a two-week high after falling sharply following the UK referendum results.
Shares in UK housebuilders Taylor Wimpey, Barratt Developments and Persimmon also climbed, extending the previous session's rally.
Defensive and safe-haven companies lost ground, with telecom company Vodafone falling 1 percent, as investment bank Citigroup cut the stock to "neutral" from "buy".
Drugmaker AstraZeneca dropped 1.8 percent, while gold miner Fresnillo, whose shares have surged 170 percent this year on the uncertain economic outlook, slipped 2.8 percent.
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