Gains in banks and commodity stocks helped push Britain's top share index higher in early trade on Wednesday, as cautious optimism on the outlook for euro zone debt saw investors buy riskier assets.
By 0813 GMT the FTSE 100 was up 24.74 points at 5,242.56, pushing the recent rally into a sixth straight session after it ended up 15.69 points, or 0.5 percent, on Tuesday.
Well-subscribed government bond auctions on Tuesday in Ireland, Belgium and Spain helped to allay anxiety on the euro zone debt situation, which helped drag the FTSE 100 6.6 percent lower in May.
Risk-sensitive banks were a big driver of gains as investors moved into more cyclical stocks.Royal Bank of Scotland led the way, up 1.6 percent.
"The focus seems to be more on economic announcements than on concerns about European debt and the market is drawing support from the fact that we broke above technical levels in the U.S.," said Keith Bowman, analyst at Hargreaves Lansdown.
U.S. stocks jumped on Tuesday, with the S&P 500 index turning positive for the year and rising above its 200-day moving average for the first time in a month, suggesting the recent downtrend may be nearing an end.
Successful bond auctions in Europe helped the euro rally against the dollar and pushed commodity prices higher.
Energy stocks were firmer as crude held around $77 per barrel and touched its highest level since mid May. Royal Dutch Shell stood out with a rise of 1.4 percent.
Cairn Energy added 2.5 percent. The company received Greenland government approval for the first of two wells of an exploration programme.
MINER STENGTH
Miners such as Rio Tinto and Xstrata were mostly stronger, supported by firmer metal prices, but Lonmin and Fresnillo eased after both were downgraded to "underweight" from "neutral" in a sector review by JPMorgan.
Aggreko was among the top blue-chip gainers, up 2.4 percent after Citigroup upgraded the temporary power supplier to "buy" from "hold", saying an investor trip to Africa highlighted its opportunities over the short, medium and long term.
But fund manager Schroders was a faller, down 2.3 percent as Citigroup cut its rating to "sell" from "buy".
Stocks going ex-dividend clipped 1.1 points off the FTSE 100 on Wednesday, with Severn Trent, United Utilities,. and 3i Group losing their payout attractions.
British consumer confidence fell to its lowest level in almost a year last month as the election and the prospect of an emergency budget darkened households' outlook, a survey by the Nationwide Building Society showed on Wednesday.
Following Tuesday's above-forecast fall in British inflation, investors will look to the latest unemployment report, due at 0830 GMT, to provide further clues on the state of the domestic economy.
Claimant count unemployment in May is expected to have fallen by 20,000 after a 27,100 decline in April, with the jobless rate seen steady at 8 percent month-on-month.
