Hopes of an international compromise on the Syrian crisis fuelled gains on the FTSE 100 Index as oil prices also eased back from recent highs.
London’s top tier added 48.9 points to 6579.7, bolstered by the receding prospect of US military strikes on Syria after Russia’s call for the country to hand over chemical weapons to international authorities for destruction.
The possibility that the Middle East will avoid further international conflict helped cut the price of oil, which fell more than a dollar a barrel to below US $109, in turn boosting airline stocks.
Brent crude dropped as low as $112.65 a barrel in London.
Sentiment was boosted further by more signs of recovery for the powerhouse Chinese economy, with impressive trade figures at the weekend followed by figures showing that factory output expanded in August at its fastest rate this year.
Industrial production rose 10.4%, accelerating from July’s 9.7%, according to official Chinese data.
Budget carrier easyJet was the steepest climber on the FTSE 100, up 5% or 67.5p to 1334.5p thanks to the fall in oil prices.
British Airways owner International Airlines Group followed closely behind with a 13.9p increase to 319.4p.
Commodities and trading giant Glencore Xstrata was also high up the leaderboard as it hiked plans for cost-cuts, saying it now expects to deliver at least US $2bn of synergies in 2014 from its mega-merger, four times more than its initial estimate.
Shares in the mining titan rose 8.7p to 330p, up 3%.
But Premier Inn owner Whitbread slid almost 3% or 82.5p on the blue-chip index to 3133.5p after like-for-like growth slowed to 2.1% in the 11 weeks to mid-August, as its Costa coffee chain was hit by the July heatwave.
Whitbread also said it has yet to see a major recovery in consumer spending outside London, with household budgets under pressure from rising bills, prompting investors to take profits.
Drugs group GlaxoSmithKline was under pressure after US regulators published draft guidance that could pave the way for generic versions of its blockbuster respiratory inhaler Advair.
Glaxo fell 3% or 48.8p to 1591.3p, adding to losses yesterday after its sale of soft drinks brands Ribena and Lucozade to Japan’s Suntory for £1.3bn failed to fuel share gains.
A rally in the banking sector helped shares in taxpayer-backed Lloyds Banking Group jump to their highest level for three years – up 2% or 1.6p to 78.4p - fuelling speculation of imminent plans for the Government to start selling down its 39% stake in the group, possibly as soon as this week.
Elsewhere, Mr Kipling and Oxo parent Premier Foods was buoyed by an upgrade from broker Shore Capital, up 10.4p to 160.1p, or 7%.