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The FTSE floated up to a six-week high as traders felt the festive cheer in the last full trading day before Christmas.
Trading was steady as a lack of negative economic news, despite the continued spread of the Omicron variant of coronavirus, provided a small uptick for most firms.
The FTSE 100 closed 31.68 points, or 0.43%, higher at 7,373.34 on Thursday.
Chris Beauchamp, chief market analyst at IG, said: “It might not be like some of the Santa rallies of years past, but at least markets have managed to claw their way higher this week, and as the final full day of London trading before Christmas marches to its close, stocks look to be in stronger form.
“Given how light the calendar has been this week it is hard to pin the move on anything firm, but at least the Omicron situation appears to be lessening in the scope of its potential dangers, providing one source of optimism.
“And the economic recovery is still on track, as the rebound in durable goods orders shows.”
Elsewhere in Europe, the other main markets also made positive strides due to optimism regarding data suggesting Omicron could be milder than previous virus strains.
The German Dax increased by 1.02% and the French Cac increased by 0.88%.
Meanwhile, sterling drifted slightly against the dollar, which benefited from steady unemployment figures.
The pound moved 0.03% lower versus the US dollar at 1.340, and decreased 0.12% against the euro at 1.184.
In company news, Flutter Entertainment flew towards the top of the FTSE after it bought Milan-based online gaming group Sisal for £1.62 billion in an effort to take pole position in the Italian market.
The Paddy Power and Betfair owner said it has been pursuing a deal to lead the Italian market “for some time”, further tapping into the country’s £16 billion gaming sector, which is the second largest regulated gambling market in Europe after the UK.
Investors welcomed the move, with shares in the business closing 235p higher at 11,540p.
Daily Mirror publisher Reach tumbled into the red on the back of reports that it could face intervention from the UK Pensions Regulator.
The Telegraph reported late on Wednesday that the company could face scrutiny over not increasing pension contributions in an effort to address a large funding deficit.
Shares in the group, which also owns the Express and Star newspapers, fell by 15p to 263p.
New River made gains after sealing a deal to sell the Dorset retail park it co-owned with Bravo Strategies, a fund run by US investment giant Pimco.
Shares moved 2.7p higher to 88.7p on Thursday after it struck the £58 million deal to sell Poole retail park, with a 30% increase on the value it bought the site for in 2019.
The price of Brent crude oil continued its recent recovery to increase 1.24% at 76.22 dollars per barrel when the London markets closed.
The biggest risers on the FTSE 100 were Melrose, up 3.65p at 158.25p, M&G, up 4.25p at 199.15p, IAG, up 2.98p at 143.96p, and Rolls-Royce, up 2.5p at 120.84p.
The biggest fallers of the day were Evraz, down 14.4p at 600.8p, Dechra Pharmaceuticals, down 120p at 5,070p, BAT, down 54.5p at 2,745.5p, and Hikma, down 26p at 2,186p.