The FTSE 100 has broken back through the 6,400 barrier ending the session with gains of 20.6 points, or 0.32%, to 6,401.5, as investors focused on commodity and utility stocks.
Mining firm Xstrata posted the biggest gains with a rise of 3.58% to £26.64, closely followed by power group Drax which climbed 3.28% to 739.5p, as rumours of a private equity bid continued to circulate.
Oil giant BP also performed well with a rise of 2.78% to 535p, while ITV added 2.69% to 114.5p, and Whitbread advanced 1.91% to £17.08, although gains were limited by Reuters which slipped 1.63% to 423.5p.
Lloyds TSB was the biggest drag on the index with a fall of 3.43% to 592p, as some investors were disappointed by its outlook statement, while Old Mutual dropped 1.76% to 181.5p, Carnival slipped 2.12% to £25.40 and BAE Systems fell 2.68% to 454p.
In the US the Dow Jones Industrial Average is down 41.5 points, or 0.33%, to 12,644.52 in early trading, as investors appear cautious over rising oil prices and the latest batch of earnings news.
JP Morgan Chase is the biggest loser so far with a drop of 1.47% to $50.88, closely followed by Microsoft which is down 1.12% to $29.06, while General Motors has slipped 1.07% to $34.26.
IBM is also down 0.77% to $97.74, while Verizon Communications has declined 0.75% to $38.15, although losses are being limited by Hewlett-Packard which has gained 0.44% to $40.96.
However Coca-Cola is posting the biggest gains with a rise of 0.61% to $47.59, while Exxon Mobil has jumped 0.53% to $75.48, Altria Group has added 0.53% to $85.29, and Alcoa is up 0.23% to $34.83.IFAonline
What made financial headlines over the weekend?
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch