London's top index hit a new intra-day record on Monday before closing on an all-time high as energy shares were boosted by rising oil prices. But the tech, utility and industrial sectors lagged.
The FTSE 100 was up 0.2 percent at 7,446.84 points by 0920 GMT, having hit a fresh high of 7,460.20 points at the open.
"The main story of the day is the commodity market as the oil price rises, dragging up other commodity prices", said Kathleen Brooks, research director at City Index in London.
The price change came after government energy ministers in Saudi Arabia and Russian Federation agreed to extend the current agreement to cut production until March next year.
In oil markets, Brent crude prices extended major gains made a day earlier, rising 0.2% to 51.87 U.S. dollars (£40.17) per barrel.
Markets were reacting positively to signs that Theresa May's Conservative Party will secure a majority in the General Election on June 8, while investors started to abandon bonds for stocks after data showed inflation reached 2.7% in April. The British benchmark was aided by downbeat action by the pound despite British inflation (http://www.marketwatch.com/story/uk-inflation-rate-at-fastest-since-2013-2017-05-16) hitting its strongest level in more than three years. Inflation is now running above the Bank of England's 2% target, and the bank's policy makers foresee the rate reaching just below 3% in the fourth quarter. "$1.3000 is the level to watch - if that breaks we should see a stronger move to $1.32", she added. That's up from $1.0975 late Monday in NY.
The real concern is wage growth, which at 2.3% has now been over taken by inflation - coming in at 2.7%.
Italian motorway company Atlantia was among the top gainers in Europe, up 3 per cent, after it launched a 16 billion euro bid for Spanish rival Abertis, whose share were little changed. Vodafone also raised its final dividend by 2% but posted an annual loss of 6.1 billion euros ($6.73 billion).
Likewise disappointing updates also hit shares in budget airline easyJet, support services firm DCC and lender CYBG, which were all weaker. The airlines said weakness in sterling against the dollar and euro shaved GBP82 million off the bottom line.