Progress by telecoms and oil stocks helped the FTSE 100 Index reverse a recent losing streak today.
The Footsie surged 43.3 points to close at 5312.6, despite having previously suffered six consecutive sessions of losses.
Oil heavyweights BP and Royal Dutch Shell contributed to the improvement as they benefited from the price of a barrel of crude oil moving back above the $64 mark.
The pair, which make up around a fifth of the top flight, both featured among the highest blue-chip risers, with BP cheering 9p to 633p and Shell advancing 26p to 1866p.
But the highest risers was mobile phone group O2, which added more than 3% - up 5p to 154p – amid continued speculation German rival Deutsche Telekom could return with an offer for the business despite scrapping plans earlier this week.
Broker Dresdner said it still rated O2 as a “buy” and raised its target price on the stock. Rival Vodafone was also in the black, 3.5p higher at 154.75p, after Dresdner advised investors to switch to Vodafone
They were joined on the way up by a string of mining stocks including Antofagasta, rising 36p to 1426p, BHP Billiton up 12.5p to 819p and Rio Tinto adding 13p to 1991p.
Investors were also lifted by a strong start to trading in New York, where the Dow Jones Industrial Average was around 50 points higher by the close in London.
Back in London, advertising giant WPP added to the upbeat mood after stockbroker Cazenove upgraded the stock ahead of its first half results due next week.
The broker said it saw potential for stronger margin improvement, helping WPP’s shares rise nearly 1% or 5.5p to 602.5p.
Drugs group Shire Pharmaceuticals added to yesterday’s considerable progress, following news that it was in preliminary talks with Barr Pharmaceuticals and had not ruled out the possibility of reaching agreement on legal action over its hyperactivity drug.
Shares lifted another half a penny to 681.5p.
On a quiet day for corporate news, much of the focus was on companies in the lower tiers.
Chocolate maker Thorntons saw its shares soar 15% after revealing that its chairman was considering making a takeover offer to end the company’s 17-year run on the stock market. Shares rose 23p to 176p.
But electrical engineering firm T Clarke was in the doldrums after saying it has experienced a significant squeeze on profit margins as main contractors on projects looked to share the burden of tight cost controls.
It weakened nearly 4% or 10.5p to 272p despite adding that the “considerable pressure” affecting its margins would start to ease.
The highest Footsie risers today were O2 up 5p to 154p, Dixons adding 4.5p to 159.25p, Antofagasta up 36p to 1426p and BAE Systems rising 7.5p to 322.5p.
The heaviest fallers were Yell down 4.5p to 442p, Friends Provident off 1p to 176.5p, Hanson down 3p to 578p and HBOS off 4.5p to 869p.