Britain's FTSE-100 ended higher on Wednesday as investors piled into telecoms group BT, pushing the stock past key chart resistance, and as a cheery broker note drove up grocery chain Morrison.
Oils were another strong point. Sector giants BP and Shell gained 1.5 percent and 1.7 percent after pipeline attacks shut down Iraqi oil exports, boosting US crude prices.
By the close of play, the FTSE-100 was up 32.5 points at 4,491.1 - rising for a second straight day but off a session peak of 4,508.3 points. Volume was improved on recent days at 2.5 billion shares, but still relatively light.
Traders said the market was caught between the benefits of solid corporate earnings and improving economic data and concern that the more positive outlook could cause interest rates to rise too quickly.
"Concerns remain over the prospect of inflation and the risk of further near-term rate hikes," said Paul Webb, a trader at financial bookmakers CMC Group.
"Tomorrow's retail sales figures will be closely watched for signs that domestic demand is increasing too quickly and if this proves to be the case, London equities are likely to see further downward pressure as a result."
On Wall Street, the Dow Jones industrial average was a shade lower when UK markets closed, hit by fears of attacks in oil producing countries.
Supermarket group Morrison, Britain's fourth-biggest food retail, was the star blue chip performer. The stock rose three percent after analysts at UBS said the company's turnaround of its recent purchase Safeway was progressing and named Morrison as their top UK sector pick.
"Customers, recognising that they are getting a better deal, are voting with their wallets," UBS wrote in a research note.
Telecoms firm BT was another standout, racing up 2.9 percent and hitting its highest level for nine months in heavy trading. Dealers said an investor road-show helped lift the shares through key chart resistance.
The mood was also buoyant on the mid-cap index, where UK speciality chemicals firm Yule Catto jumped 8.3 percent, boosted by news US authorities approved the powder form of a heartburn drug for which Yule makes the active ingredient.
Bodycote also climbed to end the day nearly seven percent higher. Analysts at Dresdner Kleinwort Wasserstein said the stock offered "scope to make money" as trading continued to improve.
Back on the blue chip index, water utility Severn Trent and private equity company 3i Group were the most prominent fallers as shares in both started trading ex-dividend, meaning investors no longer qualify for the latest payout.