British shares climbed in early trade on Monday, on course to rise for the sixth straight day, tracking gains in Asia as a last-minute $3 billion rescue of U.S. CIT Group Inc lifted sentiment.
By 0811 GMT the FTSE 100 rose 36.79 points, or 0.8 percent at 4,425.54, after posting its best weekly rise since early January at Friday's close.
UK stocks were lifted after shares in Asia rose to a 10-month high, the best performance since the collapse of Lehman Brothers, as strong U.S. corporate earnings spurred optimism about the pace of global economic recovery.
Banks were the biggest gainers on the UK index, with Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland rising between 1.2 percent and 5.9 percent.
Jim Wood-Smith, head of research at Williams de Broe, said the FTSE 100 could drift higher yet as investors with large amounts of cash move into the market.
"Ordinarily we would argue there is not enough in the news flow nor in the value of the market for there to be a strong run from here," he said.
"But knowing the levels of cash that most people are supposed to be holding one has to suspect that holders of cash are going to be forced to come back into the market and that is going to drive prices upwards."
The market also drew support from data from property website Rightmove showing that the falls in property prices in England and Wales over the past year may have bottomed out.
Miners were also higher as metals prices benefitted from the prospect of a global recovery. Anglo American, BHP Billiton, Eurasian Natural Resources Corp, Kazakhmys, Rio Tinto and Xstrata were up between 0.6 and 3 percent.
INSURERS HIGHER
Friends Provident gained 1.5 percent after financial buyout firm Resolution sweetened its proposed offer for the insurer, including a cash element and a commitment on dividends.
Other life insurers were also higher, with Aviva, Legal & General, Old Mutual and Prudential up between 0.9 and 3.2 percent.
Defensive stocks fell out of favour, with tobacco firms British American Tobacco and Imperial Tobacco down 0.7 and 0.5 percent respectively.
Food retailers were also lower, led by a 0.5 percent fall in British supermarket Tesco
But GlaxoSmithKline rose 2.3 percent after the success of its partner firm in a lupus drug clinical trial which, if turned into a blockbuster drug, could see profits being split between GlaxoSmithKline and partner Human Genome Sciences Inc.
Global markets were lifted by U.S. lender CIT Group's tentative deal with bondholders for $3 billion in rescue financing, a move which would prevent the firm becoming the latest casualty in the financial crisis
Further positive news on the global economy came as a survey released on Monday by a group of economists found that the recession in the U.S. appeared to be easing but had probably not yet ended
