Energy firms were lifted during trading on Thursday after the regulator showed more restraint than expected with its price cap.
Ofgem said it would impose a price cap of £1,136 on dual fuel customers paying by direct debit, forcing suppliers to cut prices to that level or below.
However, the cap was more lenient than analysts had been expecting, with some of the most pessimistic predicting a cap of £1,120.
The news boosted the likes of British gas owner Centrica, which closed 5% higher at 150.55p.
Meanwhile, SSE and United Utilities were up by 0.4% and 1.5% respectively.
Russ Mould, investment director at AJ Bell, said: “Ofgem has therefore shown its teeth but perhaps not bitten quite as hard as it could have.
“Its report now means that the utilities – and investors – know exactly where they stand and, as the biggest two suppliers in the retail UK electricity market, Centrica and SSE may be particularly relieved.”
The FTSE 100 as a whole put in a fairly dismal performance, however, closing 0.87% or 64.32 points lower at 7,318.96.
On the continent, Germany’s Dax was also lower, falling by 0.65%, while the Cac 40 in France was down by 0.14%.
In currencies, sterling continued to strengthen against the dollar after it jumped on Wednesday following reports that Brexit negotiators in Britain and Germany were making progress on an agreement.
The pound was up 0.36% against the euro at 1.114 and was up 0.21% against the dollar at 1.293.
Oil prices were falling again after a spike earlier in the week on fears of a tropical storm impacting supply in the US.
At time of writing, Brent crude was down 1% at 76.340 US dollars a barrel.
Annual results revealed for Go-Ahead, the operator of Southern Railway, showed the firm notched up a 6.5% rise in pre-tax profits to £145.7 million for the year to June 30, sending shares 12% or 195p higher to 1,830p.
Melrose Industries swung to a half-year loss after booking hefty costs linked to its controversial £8 billion hostile takeover of engineering giant GKN.
The group posted a pre-tax loss of £303 million in the six months to June 30, compared with a £48 million profit in the same period last year. Shares were up 7.3p to 230p by the market close.
Dixons Carphone, which is still reeling from a massive customer data breach, said profits will be in line with expectations at £300 million, as it posted first-quarter results.
Group and UK revenues fell 2%, but the World Cup supported TV sales, which made up for weaker performance in white goods. Shares fell 2.6p to 161.55p.
Bovis Homes became the latest housebuilder to shrug off uncertainty in the property market with a hefty rise in half-year profit.
Pre-tax profit rose 41% to £60.2 million in the half-year to June 30, while revenue increased 1% to £432.2 million, helping lift shares 14.5p to 1,146p during the session.
Sirius Minerals’ shares tanked 16% or 5.36p to 27.3p after the firm warned over the escalating cost of its potash mine.
The group said cost of construction of its mine in the North York Moors is rising by between 400 million US dollars and 600 million US dollars.
McCarthy & Stone’s profit is set to fall amid a slowdown in retirement homes sales.
The retirement housebuilder said its sales completions fell in the year from 2,302 units to 2,134 units. Shares closed 3.3p higher at 115.2p.
The biggest risers on the FTSE 100 were Centrica up 7.15p to 150.55p, Melrose Industries up 7.3p to 230p, United Utilities up 10.8p to 723.6p and Severn Trent up 29p to 1,951.5p.
The biggest fallers on the FTSE 100 were Just Eat down 39.6p to 699.2p, BHP Billiton down 73.6p to 1,544.8p, Ocado Group down 43.1p to 998.4p and Admiral Group down 67p to 2,028p.
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