The FTSE 100 made up some of the ground lost in recent days, gaining over 100 points in early trading, amid talk in Europe of plans to recapitalise the banking system.
The blue chip index jumped to 5,072 points initially, before settling at 5,000.23 points by 8:54am, with miners and banks taking the index up 1.1%.
The rally in the UK followed gains in the US overnight where investors sent the S&P 500 up 2.3%, or 24.7 points, to 1,123.95.
The Dow also finished higher, up 1.4% or 153 points to 10,808, as markets made a stand following a sharp sell-off in the last few days.
Meanwhile, in Europe shares also climbed, with the French Cac 40 up 1.7% or 47.41 points, at 2,897.96, and Germany's Dax up 1.4%, or 70.79 points, at 5,287.5.
Stocks made gains as European policymakers thrashed out plans to tackle the eurozone crisis by pumping in fresh capital to the banking system.
Politicians are discussing ways of funding banks across Europe to ensure they can withstand the impact of potential haircuts on sovereign debt positions.
Fears have been mounting over the exposure of European banks to the sovereign debt of peripheral European economies, but ministers are now understood to be addressing this to allay fears of another banking crisis, according to the Financial Times.
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