Banks boosted trading as conditions in the eurozone continued to stabilise, while Burberry was in demand after releasing excellent third-quarter results that showed revenues rose 27 per cent in the three months to December 31.
A raft of positive corporate earnings and a strong session in Asia gave investors confidence and pushed the index above the 6,050 mark throughout the day.
“Today’s gains are as much about investors bargain hunting stocks in the UK that had suffered three days of falls as investors becoming more optimistic about company earnings,” said Joshua Raymond, market strategist at City Index.
“It’s been a good news day and investors have lapped it up by buying into risky asset classes such as mining and energy firms.”
Burberry topped the blue chip leader board, up 5.29 per cent to 1,115.00p after it forecast full-year profit at the top end of market expectations.
“ARM Holdings is also rising again after being upgraded to a “buy” from “neutral” by Goldman Sachs,” said Michael Hewson, market analyst at CMC Markets.
Petrofac, which supplies services to oil companies, gained 4.14 per cent to 685.00p after it announced a $1.2bn (£750m) contract win in Algeria. It is to help develop gas fields for In Salah Gas, a venture made up of BP, Algeria’s state-owned Sonatrach and Norway's Statoil.
Miners remained strong, led by Kazakhmys, which was lifted 3.03 per cent to 665.00p. Rio Tinto also rose 1.49 per cent to 4,450.00p after it said it had produced record volumes of iron ore last year as Chinese demand soared, causing price hikes.
Among the fallers, Essar Energy lost the most ground, down 4.39 per cent to 533.00p after issuing a $500m convertible bond, which diluted its shares.
Pharmaceutical giant GlaxoSmithKline also continued to fall, losing almost two per cent to close at 1,181.50p after its announcement on Monday that a £2.2bn legal charge would wipe out its fourth-quarter profits.
Among the mid-caps, housebuilder Taylor Wimpey jumped 8.39 per cent to 38.10p after a bullish trading update and admitted it has had several approaches for its North American business, which it hopes to sell soon.
Property companies Barratt Developments (up 4.61 per cent to 101.00p), Persimmon (up 5.37 per cent to 459.10p) and St. Modwen Properties (up 5.03 per cent 179.70p) joined it in the top ten risers in sympathy on its positive outlook.
Equipment rental group Ashtead climbed 6.97 per cent to 170.30p after it announced it had ended its bid interest in Lavendon, which rejected its 115p per share offer.
And spread better IG Group slumped by 7.23 per cent to 481.00p after it revealed it had taken a £143.1m write-down from its Japanese business, which has been hit hard by regulatory changes.
After a three-day holiday, US markets saw initial enthusiasm dampened by Citigroup, which reported lower-than-expected earnings despite recording a $1.3bn profit.
“After the bell we have key earnings releases from technology companies Apple and IBM with Apple’s impending results being overshadowed by yesterday’s news about CEO Steve Jobs taking a leave of absence for health reasons.
“Earnings are expected to come in around $5.39c a share while IBM earnings are expected to come in with estimates around $4.08c,” Hewson said.
The Dow Jones industrial average closed up 50.55 points, or 0.43 per cent, at 11,837.93; the Standard & Poor's 500 Index finished up 1.78 points, or 0.14 per cent, at 1,295.02; and the Nasdaq Composite Index closed up 10.55 points, or 0.38 per cent, at 2,765.85.