BRITAIN'S leading share index rose almost 1 per cent yesterday, to hit its highest closing level in four months as surging crude prices pumped oil shares higher, while bid activity powered nuclear generator British Energy.

The benchmark FTSE 100 index closed up 52.5 points at 6,304.3, still well off a session high of 6,348.6 after a survey showed US consumer confidence tumbled to its lowest in 28 years this month. The index gained 1.6 per cent this week, but is still down 2.4 per cent for the year.

Martin Slaney, at GFT Global Markets, said: "We had the lowest consumer confidence figures in the US since the 1980s so that's really what turns the US negative. No doubt that's going to put a cap on UK stocks as well going into next week."

Jimmy Yates, at CMC Markets, added: "There has to be the risk that the FTSE is looking ripe for profit-taking, but rising commodity prices are suggesting that any selling pressures could struggle to last beyond the short term and, despite economic pressures, investor sentiment remains somewhat upbeat."

Record profits and a return to dividend payments from British Airways helped put the London market on the front foot. Although the airline has contended with spiralling oil costs and the botched opening of Heathrow's Terminal 5, the stock was cheered 4 per cent, or 9p, to 233p by profits of £883 million and the first shareholder pay-out since 2001.

The airline was surpassed by British Energy, which gained more than 5 per cent after it revealed it had received a range of proposals from several parties. Shares were 35.5p stronger at 715.5p, reversing losses seen in recent days amid fears that EDF would win the Scots company with a proposal worth less than 700p a share.

Thomas Cook and TUI Travel shared in BA's recovery, with the travel firms ahead 7.5p at 263.25p and 4.75p at 253.75p respectively, despite soaring oil prices.

Several retailers were also on stronger ground, with Next adding 46p to 1,285p, and Argos owner Home Retail Group 8.25p up at 260.5p. Marks & Spencer, which is due to publish results this coming Tuesday, lifted 13.25p to 415p, a rise of more than 3 per cent.

Among the Footsie shares in negative territory, engine maker Rolls-Royce fell 10.75p to 439.25p after it was reported that Airbus was developing a biofuel that could power a third of the world's aircraft by 2030.

Sainsbury's fell 4.75p to 372.76p as more analysts downgraded the supermarket giant in the wake of its results earlier this week. While the headline figures showed a 28 per cent rise in annual profits, the City is clearly concerned about the company's ability to grow sales and earnings in a tougher climate.

London Stock Exchange surged 5.1 per cent on talk of bid interest after Sanford Bernstein said in a report that the fall in its share price had brought the UK bourse within reach of Nasdaq and NYSE Euronext.