The FTSE 100 advanced 0.2% to 7,290 and eased back after breaking the 7,300 mark.
Shares in supermarket giant Sainsburys (SBRY) rallied on strong sales growth at Argos, which it acquired for £1.3bn last year.
Chief executive Mike Coupe said it cut prices over the holiday period as it faces stiff competition from budget-friendly stores Aldi and Lidl, but provided no guidance on profit in the pre-close trading statement.
ETX Capital analyst Neil Wilson said sterling slumped as the UK's trade deficit widened more than anticipated in November.
The deficit on trade in goods and services was estimated to be £4.2bn in November 2016, which was £2.6bn more than October 2016.
In the US, the S&P 500 opened 0.2% to 2,273 and the Dow Jones advanced 0.5% to 19,962.
Hong Kong index Hang Seng was 0.8% higher at 22,935 and the SSE Composite index in Shanghai slumped 0.8% to 3,136.
West Texas Intermediate and Brent crude oil jumped over 2% to $52 and $55 per barrel, respectively.
Gold declined 0.4% to $1,179 per ounce and copper was flat at $5,732 per tonne. FTSE 100 RISERS AND FALLERS
Thomson Cruises owner TUI (TUI) was the biggest FTSE faller, while outsourcers Capita (CPI) and Babcock International (BAB) came under pressure.
Recovering housebuilding firm Taylor Wimpey (TW.) reported full-year results that are expected to be at the upper end of market forecasts.
Shares in the stock rallied strongly last week, but investors cashed in for profit following the impressive update. Chief executive Pete Redfern said earnings before interest, tax and amortisation was likely to be at the top end of a range between £706m and £755m.
FTSE 250 RISERS AND FALLERS
Aerospace equipment manufacturer Cobham (COB) dashed hopes of a final dividend for the year to 31 December due to rising net debt and lower-than-expected trading profit. Investors were unhappy with the lack of payoff, causing the stock to plummet 14.9% to 140p.
Luxury fashion brand Ted Baker (TED) was in the spotlight as sales gained 10.6% at constant currencies and margins remained firm in the 8 weeks to 7 January. The market was encouraged by chief executive Ray Kelvin's announcement that it will deliver full-year results in line with market expectations.
Cinema chain and popcorn pusher Cineworld (CINE) reported slower revenue growth as sales declines from 12.3% in the year to 31 December 2015 to 8.3% in the 12 months to 31 December.
SMALL CAP RISERS AND FALLERS
After several profit warnings, outsourcer Interserve (IRV) bounced back as it flagged solid trading and lower-than-expected net debt at the end of its 2016 financial year.
Small cap Amur Minerals (AMUR) reported tests that revealed higher potential recovery rates on key metals found in deposits at its Maly Kurumkon/Flangovy site in Russia.
Gold miner Golden Saint Resources (GSR) fell 13.8% as excavation work at its Tongo site revealed an overburden thickness of 5.2 meters, which resulted in the removal of 12,500 tonnes.
Eccentric welly maker Joules (JOUL) made a step in the right direction after delivering a 22.8% jump in sales over Christmas. The company reported strong growth in its new and existing stores, pushing its share price 2.5% higher.
Recruiter PageGroup (PAGE) reported a record quarter as its gross profit gained 3.8%. Investors overlooked a 6.7% profit decline in the UK as uncertain market conditions resulted in slower recruitment. Story provided by StockMarketWire.com