The FTSE 100 opened higher as investors responded positively to news BP has agreed to fund a $20bn oil spill compensation package.
At 8.28am BST, the index was up 0.15% or 7.71% points to 5, 245.63.
The oil giant was the morning's leading share, advancing 6.8% to 359.9p, despite the announcement it has cut dividends for the rest of the year as part of the compensation deal agreed with the US Government.
Banks were also big winners. Royal Bank of Scotland rose 1.7% to 45.94p following the sale of its Pakistan business for £34m while Lloyds TSB gained 0.92% to 56.14p.
Miners were among this morning's casualties led by Petrofac, down 1.4% to £12.69. Elsewhere, Schroders NV dropped 1.31% £10.54.
In contrast, European bourses fell as rumours circulated Spain planned to ask for a bailout from the IMF. France's CAC 40 fell 0.18% to 3,669.35 while Germany's Dax dropped 0.24% to 6,175.90.
Markets will also be keeping a close eye on data released today. UK retail figures to be released this morning are expected to show a rise in May while UIS data includes CPI and jobless numbers and the Philadelphia business index.
On Wall Street, the Dow Jones was unchanged, ending the day 0.05% or 4.69 points higher at 10,409.46.
The day's economic data gave a mixed picture as US government said housing starts fell more than expected in May, casting a shadow over better-than-expected industrial production data for the same month.
Meanwhile, BP's New York listed shares gained 1.43% to $31.85.
In Japan, the Nikkei ended five days of gains to close down 0.67% or 67.75 points to 9,999.4 as investors remain concerned Asian markets will be impacted by the European sovereign debt problems.
What made financial headlines over the weekend?
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