Source - SMW
Weaker sterling boosted the FTSE 100, with cigarette seller British American Tobacco (BATS) among the beneficiaries.

As the blue-chips generate the majority of their earnings overseas, a weaker pound can have a positive impact.

The FTSE closed 0.4% higher at 7,730. 

Budget airline EasyJet (EZJ) flew 4.7% higher to £15.84 after broker Morgan Stanley said it will benefit from troubles at its short-haul rivals.

Nurofen owner Reckitt Benckiser (RB.) ticked 1.8% higher to £69.13 on the back of a positive note from Berenberg.

Consumer good giants Unilever (ULVR) rose 2.2% to £41.08 on media rumours it might be considering a takeover of tonic water maker Fevertree (FEVR), which enjoyed a bigger uplift of 10%.

Retail sales fell 1.5% in December from the previous month, according to the Office for National Statistics.

Brent crude oil dropped 1.1% to $68.51 per barrel. Gold glittered at $1,333 per ounce. 

MID AND LARGE CAP RISERS AND FALLERS

Funeral services provider Dignity (DTY) crashed 49.9% to 959.5p on a warning that profits would be substantially behind forecasts. The company plans to cut prices to protect its market share.

Insurer Esure (ESUR) forecast between a 30% and 35% rise in annual pre-tax profit and announced that chief executive Stuart Vann had stepped down. The stock was flat at 245p.

High street bank HSBC (HSBA) announced it will pay $101.5m in penalties to resolve a US investigation into currency rate manipulation.

AstraZeneca (AZN) received a 1.2% boost to £50.43 following approvals in Japan for some of its asthma and ovarian cancer treatments.

SMALL CAP RISERS AND FALLERS

Carpet retailer Carpetright (CPR) revealed its second profit warning in two months as Christmas trading disappointed. Investors were concerned about the company's outlook as the shares plummeted 39.4% to 99.6p.

It was also a difficult Christmas for Bonmarche (BON). The mature clothing retailer suffered a 17% fall to 105p after sales in the 13 weeks to 30 December declined 5.5%.

Blancco Technology (BLTG) reported sales for the first half of the year would be slightly behind the previous year's levels. Shares in the mobile device diagnostics firm dimmed 10.5% to 68p.

AFC Energy (AFC) informed the market that the quarter to 31 December was important after the alternative fuels company made very significant improvements to its fuel cell system. The stock jumped 15.8% to 12.4p.