The FTSE 100 closed at its highest level since May 2008 yesterday as investors continued to snap up cyclical names, including the UK's semi state-owned banks.
The blue-chip index rose 0.74% to 6,098 and surpassed its 2011 peak of 6,091 seen in February.
Among the winners were Lloyds Banking Group, up 4.94% at 53.27p, as well as peer Royal Bank of Scotland which was 3.83% firmer at 349.90p.
The banks helped counter falls at insurer Aviva - down 2.15% at 373.70p after an earlier fall of 2.5% amid fears over its dividend - as well as at Imperial Tobacco which was off 1.4% at £24.39 early in the afternoon but since regained some ground.
The UK's leading index has enjoyed a boost since late December, rising about 4%.
It has been helped higher by US politicians coming to an agreement on the country's fiscal cliff, although investors will be looking for a more permanent solution in the next few months.
On Wall Street, traders were optimistic after a positive trading update from aluminium producer Alcoa kicked off the Q4 earnings season. The Dow Jones closed up 0.46% at 13,390.51.
Meanwhile, Wall Street's 'fear index' fell to a fresh 5½-year low as investors turn increasingly positive on the global outlook. The Vix has moved lower over the past year, and touched 13.2 points on Wednesday to reach its lowest level since June 2007.
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