Despite turbulent mid-day trading, the FTSE100 built on early gains to rise 34.73 points (0.91%) to 3,851.17 shortly before 3pm.
Bank shares made gains after a recovery for the sector in the US overnight, with Lloyds Banking Group up 7.24%, Royal Bank of Scotland added 3.62% while HSBC shares climbed 3.5%.
Shares in Cadbury added 2.75% after the firm reported a 30% rise in profits during 2008.
Experian shares were the biggest loser on the blue chip index, down 2.64% despite recently renewing a contract to provide credit reports to Vanquis Bank.
The Dow Jones fell sharply in early trading, removing much of yesterday's rally and prompting further fears the index might drop below the 7,000 points barrier.
The main US index dropped 134.61 points (1.83%) to 7,216.33 after opening, with banks causing much of the drag.
Citigroup shares fell 14.42%, Bank of America dipped 8.25% and American Express lost 6.53%, wiping out gains from yesterday's rally.
General Motors shares continued to climb, up 6.76% after hitting new lows a week ago.IFAonline
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created