LONDON FTSE 100 index posted a record high close on Friday, rounding off its fifth straight week of gains, after U.S. non-farm payrolls data showed fewer jobs than expected but growth in wages.
The FTSE 100 .FTSE index was up 14.74 points or 0.2 percent at 7,210.05 points, the index's first-ever close above 7,200.
After ending 2016 on a record high, the FTSE 100 has rallied further to hit two fresh record highs since, its last at 7,211.96 points.
U.S. employment increased less than expected in December, but a rebound in wages pointed to sustained labour market momentum that sets up the economy for stronger growth and further rate increases by the Federal Reserve this year.
The data sent the FTSE into positive territory, as appetite for the internationally exposed index was buoyed by a fall in the pound.
Defence company BAE Systems (BAES.L) rose the most, gaining 3 percent for its biggest advance since a two-day rally after the U.S. Presidential election, when the surprise victory of Donald Trump sent defence stocks soaring.
Bernstein rated the company 'outperform', saying a stronger post-election U.S. budget outlook should be positive for U.S. demand for BAE.
Shares in Lloyds (LLOY.L) rose 2 percent after broker Barclays raised its rating on the stock to "overweight" from "equal-weight" and increased its target price, citing an expected rise in net interest margin for the bank.
"We expect Lloyds to return over 10 bln pounds of capital to shareholders through to 2019, equivalent to almost a quarter of its current market cap or a little under 15p per share," analysts at Barclays said in a note.
In all, financials contributed 14 points to the FTSE 100's rise, with the sector seen as benefiting from returning growth and inflation in the global economy.
Likewise an upgrade to "outperform" from "neutral" helped shares in payments processor Worldpay (WPG.L) jump 1.6 percent.
Goldman Sachs started with a "buy" rating on mid-cap valve-maker Rotork (ROR.L), sending its shares 3.7 percent higher.
Together with a 7.8 percent rise in TP ICAP (TCAPI.L), this helped underpin the UK mid cap index .FTMC, which was up 0.2 percent.
TP ICAP, formerly called Tullett Prebon, rallied after a strong trading update. The interdealer broker said it expected 2016 revenue to rise around 12 percent from 2015's 796 million pounds ($986 million), helped by a spike in trading volumes after the U.S. presidential election.
Analyst Paul McGinnis at Shore Capital said volatility caused by expectations of rising interest rates after the U.S. election had boosted demand for the firm's traditional product areas.
Precious metals miners Randgold Resources (RRS.L) and Fresnillo (FRES.L) weighed on the blue chips, falling 2.8 percent to 3.5 percent as the price of gold slipped against the stronger dollar after the jobs data.
(Editing by Larry King)