Britain's leading share index gained 0.7 percent on Thursday as robust output numbers from Rio Tinto buoyed mining stocks, while banks and oils were stronger as investors bought on the dips following two days of weakness.
At 0920 GMT the FTSE 100 was up 38.29 points at 5,511.77, bucking a two-session losing streak, after China's decision to tighten banks' reserve requirements weighed on sentiment.
Miners rallied after global miner Rio Tinto lifted investor sentiment by beating its own forecast for iron ore output in the fourth quarter.
Rio Tinto added 2.4 percent, while Eurasian Natural Resources, BHP Billiton, Kazakhmys, Fresnillo, and Vedanta Resources were up 2.1 to 2.7 percent.
Xstrata was the top FTSE 100 riser, ahead 3.1 percent as Investec started coverage of the miner with a "buy".
"The market's been excited by the updates from some of the mining majors, which have shown output levels increasing and demand for raw materials remaining very robust, and that's certainly provided a positive boost," said Henk Potts, market strategist at Barclays Wealth.
Energy issues also offered support, bouncing back from two sessions of losses, with crude up 0.5 percent as fears over China's move to tighten monetary policy ebbed away.
Royal Dutch Shell, BP and Tullow Oil rose 0.2 to 0.4 percent.
Banks rallied, too, shrugging off a profit warning from France's Societe Generale on Wednesday, taking their cue from a bullish session on Wall Street as investors looked optimistically ahead to fourth-quarter figures from JPMorgan Chase due on Friday.
Barclays, Standard Chartered, Lloyds Banking Group and Royal Bank of Scotland added 0.5 percent to 2.9 percent.
INSURERS RISE
Life Insures gained ground, with Old Mutual up 2.1 percent after Morgan Stanley raised its target price to 145 pence from 138 pence.
The broker also raised target prices for Prudential and Standard Life, which rose 1 and 1.2 percent, respectively, while Aviva was 1.6 percent higher in a sector that has been the subject of months of consolidation speculation.
Confectioner Cadbury added 0.8 percent on hopes that U.S. chocolate maker Hershey might top Kraft's $17 billion hostile takeover offer.
On the downside, retailers were under pressure. Home Retail , Britain's biggest household goods retailer, dipped 3.5 percent after warning trading would stay tough in the coming year.
However, the group, which runs catalogue-based Argos stores, lifted full-year profit expectations, helped by cost cutting and a rise in Christmas sales.
Other retailers including Kingfisher, Marks and Spencer and Next fell 0.6 to 1.3 percent.
HMV Group and Mothercare fell 4.4 and 4.2 percent, respectively, after both issued trading updates.
HMV is in advanced talks with night club operator Luminar over a possible partnership deal, the Times said.
Investors took profits on food retailers, which have been strong performers thanks to their Christmas trading updates.
Wm Morrison Supermarkets, J Sainsbury and Tesco fell 0.1 to 0.5 percent.
No major British economic data will be released on Thursday, so the main macro focus will be on U.S. December retail sales numbers, due at 1330 GMT.
The latest weekly U.S. jobless claims numbers will also be reported, together with December import and export prices, followed at 1500 GMT by November business inventories and the revised December Philly Fed index.
