The FTSE 100 Index gained 51.30 points, or 0.9%, to 5,932 points, led by a rally from Cadbury Schweppes.
Cadbury Schweppes rose 3.17% to 537.50p on news it expects to deliver revenue growth at the upper end of its goal range.
BP gained 1.40% to 651p on reports a storm is heading towards a range of oil production rigs in the Gulf of Mexico. US light crude climbed 31 cents to $75.21 a barrel.
Xstrata advanced 0.61% to 2,304p after it reported a 42% surge in first-half profit, helped by strong metal prices and increased volumes.
Lloyds TSB fell 1.12% to 528p after it reported a modest increase in profits for the first half and said it was seeing a further deterioration in bad debts.
Corus dropped 2.98% to 415p after UBS chopped the shares to “neutral” from “buy” suggesting 2007 could see negative steel price momentum.
In the US, the Dow Jones Industrial Average has added 41.14 points, or 0.4%, to 11,166.87 points after profits from Time Warner and Procter & Gamble beat analysts' estimates.
Time Warner has climbed 57 cents to $16.83 after reporting second-quarter net income was 24 cents a share, up from 9 cents a year ago.
Procter & Gamble has risen $1.91 to $57.84 after it said net income in the fiscal fourth quarter climbed to 55 cents a share, bolstered by its purchase of Gillette.
Cigna, the fourth-biggest US insurer, has added $9.82 to $102.48 after it reported second-quarter earnings of $2.33 a share, or $2.31 a share excluding some items.
US Steel has lost 80 cents to $61 after UBS AG cut shares of the biggest US steelmaker to "neutral" from "buy".IFAonline
Industry Voice: Scottish Widows pension expert Robert Cochran and economist Andrew Scott discuss the future of employment and income, in episode three of Scottish Widows' podcast series.
What made financial headlines over the weekend?
Follows McVey's resignation
Schroders and Aviva Investors
LightTower Partners, Seneca Partners and Unicorn AM