Again turnover topped a billion shares, with signs that some investors were scrambling to buy, afraid that they were being overtaken by the stock market's strength.
After opening lower, shares picked up steam with futures-buying once again a significant influence.
The FT-SE 100 index, after being 13.7 points down, closed for the first time above 3,500 with a 38.8 gain to 3,520.3.
'It's crazy,' one trader said. 'These days even a profit warning sends a share higher.' He was referring to Bridon, the wire maker, which said it would break even in the second half of last year before taking into account up to pounds 25m of restructuring costs.
The shares promptly plunged 30p before ending 4p higher at 160p, with some talking hopefully about takeover possibilities.
Interest rate speculation before the fortnightly Bundesbank meeting is now a traditional part of market life. But the latest flare-up, ahead of today's meeting, occurred as talk gathered strength that US rates will soon be forced higher.
Confident noises from the Treasury about a recovering economy were another contributory factor in the day's excitement.
Eastern's offering was the purchase of 500,000 of its own shares at 699p.
Only two weeks ago it picked up 1.2 million at about 442p. Its willingness to lift its buying price by 57p in such a short time was seen as a favourable signal to high-yielding utilities, already scoring from the lower interest rate talk.
The privatised electricity group, the first to indulge in buy-backs, has shareholders' approval to take in another 11.8 million shares.
It had been felt that the strength of the utilities could deter other privatised groups from attempting buy-backs. But the Eastern example suggests otherwise and such exercises are still earnings-enhancing.
Eastern shares surged 21p to 722p; others up included Manweb, 19p at 833p, and Norweb, 24p at 800p.
Waters were buoyant, with Severn Trent 13p higher at 632p.
British Aerospace's remarkable display continued, with the shares up 28p at 573p.
Other motor-related shares remained firm, with GKN up 10p at 614p and Lucas Industries 9p at 232p.
Standard Chartered was the outstanding feature on the banking pitch, gaining 48p to 1,410p; Abbey National rose 11p to 510p.
Inchcape, the international trader, seems to have overcome disappointment with last week's maiden investment conference. The shares, with Panmure Gordon still offering keen support, rose 11p to 606p.
Allied-Lyons, up 14p to 649p, enjoyed Kleinwort Benson backing but BAT Industries wilted 8p to 521p, with UBS making negative comments. Rights issue fears ruffled Cadbury Schweppes, off 4.5p to 518.5p, and retailer Pentos, 4p down at 35p.
Oils were firm, reflecting US interest. British Petroleum rose 6p to 381.5p and Shell, despite sell advice, 3p to 729p.
British Steel had a see-saw session, falling 3p to 137p as the European steel industry's structural changes remained uncertain, with worries that the European Commission could threaten to renounce aid.
But the improvement in the US steel industry was eventually seen as the more important factor and the shares closed 5p higher at 145p.
Reuters was at one time down 41p as Goldman Sachs removed the shares from what it calls its 'priority' rating. They closed 8p lower at 1,967p. Flextech, suspended at 379p as the takeover of the European programming assets of United Artists went through, returned at 423p.
Agency crosses helped Johnson Fry, the financial group, and Southnews, the local newspaper publisher. A 3-million cross cleared an overhang at Johnson Fry, up 22p at 275p; Southnews jumped 36p to 249p following a cross at 250p.
CentreGold, a computer and video games publisher, edged ahead 4p to 149p. Some believe a US takeover is being lined up, which should lead to a re-rating of CentreGold, floated at 125p in October.
Paterson Zochonis jumped on equalisation rumours. The voting shares rose 48p to 603p and the non-voters 48p to 553p.
T&N, the car components group, eased 4p to 245p, with Panmure Gordon apparently selling after the strong run. Berisford International put on another 3p to 235p.
In the search for recovery shares some investors alighted on London & Metropolitan, the property group which last year had its second financial restructuring in three years. The shares, best performers of the day, jumped 6p to 16p. Seaq put volume at 591,000.
The FT-SE 100 index rose 38.8 points to 3,520.3 and the FT-SE 250 index 45.5 to 4,150.9. Both hit new highs. Turnover was 1,084.6 million from 43,564 deals. The account ends on 11 February with settlement on 21 February. Gilts were neglected.
Phil Edmonds, the former England spin bowler, is thought to have sold his shareholding, believed to be 2 million shares, in Bridgend, the bathroom fittings to hotels group. In a 6.2 million turnover, the price rose 3p to 28p with some speculating the Edmonds move heralds a bid. Mr Edmonds acquired his interest when Woodington, a company he revamped, was taken over.
Stockbroker Williams de Broe is backing a pounds 1.1m rights issue by Brancote, a mineral exploration business with a 535 share presence. The company, run by geologists John Prochnau and Colin Loosemore, needs the cash to continue exploration. Williams de Broe is also handling the buyout of a Brancote stake formerly held by London Securities. The rights price is 33p.Reuse content