The UK oil and gas index <.FTNMX0530> rose 2.3 percent, making it the top sectoral gainer, as oil prices climbed to their highest level in a year after Russia said it was ready to join a proposed deal to cap oil production. [O/R]

Basic resources stocks were also in demand, with the FTSE 350 mining index <.FTNMX1770> gaining 2.1 percent as prices of copper , nickel and aluminium rose between 0.8 percent and 2.6 percent.

"Continuing the by now-familiar pattern, international earners are topping the FTSE 100," Hargreaves Lansdown equity analyst Nicholas Hyett said.

Shares in oil majors Royal Dutch Shell and BP (>> BP plc) and miners Anglo American (>> Anglo American plc), BHP Billiton (>> BHP Billiton plc), Antofagasta (>> Antofagasta plc), Rio Tinto (>> Rio Tinto plc) and Glencore (>> Glencore PLC) rose between 2.0 percent and 2.8 percent.

The blue-chip FTSE 100 index <.FTSE> closed 0.8 percent higher at 7,097.50 points, not far from a record 7,122.74 set in April last year.

The benchmark index, up nearly 23 percent from a post-Brexit sell-off in sterling terms, posted a gain of 2.1 percent last week, helped by a plunging pound that helped the index's international, dollar-earning firms as well as exporters. However, it is up only 13.5 percent in dollar terms.

Housing-related stocks, however, were firmly at the bottom of the FTSE scoreboard, with traders citing last week's weak Halifax house price numbers as well as the prospect of a U.S. rate hike by the end of this year.

Travis Perkins (>> Travis Perkins plc), down nearly 30 percent this year, has not managed to climb back to pre-Brexit levels, and closed 2.6 percent lower. Persimmon (>> Persimmon plc) and Taylor Wimpey (>> Taylor Wimpey plc) fell 3 percent and 2.6 percent respectively.

Ratings downgrades sent easyJet (>> easyJet plc) shares down 2.3 percent after target price cuts from Liberum and Societe Generale. The latter also cut its rating on the stock to "sell".

The budget airline issued a profit warning last week, hit by security concerns and foreign exchange problems.

(Additional reporting by Atul Prakash; Editing by Louise Ireland)

By Kit Rees