Britain's top share index gained 1.4 percent early on Thursday as the Federal Reserve inspired confidence that things may be improving for the ailing global economy, lifting investor confidence and bolstering commodity stocks and banks.
By 0807 GMT the FTSE 100 was 58.50 points higher at 4,248.09 after gaining 2.3 percent on Tuesday to post its highest close since February 13.
Factory output in Asian export powerhouses Japan and South Korea picked up in March in a sign that the global slump may be easing, after the Federal Reserve said the U.S. economic contraction was slowing.
Banks added most points to the blue chip index with HSBC, Standard Chartered, and Lloyds Banking Group adding between 2.2 and 6.5 percent.
Barclays jumped 10.3 percent, the top gainer on the index after Royal Bank of Scotland upgraded it to "buy" from "sell".
U.S. stocks shot higher on Wednesday after the Fed said the pace of contraction of the economy appears to be slowing.
"The FOMC was very positive, and that's exactly what investors are looking for, they weren't looking to sell and this has given them the excuse to buy," said Joshua Raymond, market strategist at City Index.
Commodity stocks climbed as raw material prices rose on tentative hopes of an improved demand outlook.
Miners Rio Tinto, Kazakhmys, Eurasian Natural Resources, Anglo American, Lonmin and BHP Billiton added between 3.1 and 7.2 percent. Kazakhmys and Anglo American both issued trading updates.
Energy companies gained as crude rose to nearly $52 per barrel. BP, Royal Dutch Shell, BG Group, Tullow Oil and Cairn Energy added between 0.9 and 2.3 percent.
BG posted forecast-beating first-quarter earnings.
RATES ROCK-BOTTOM
At the conclusion of its monetary policy committee meeting, the Fed kept its interest rates unchanged at rock-bottom and the Bank of Japan also kept interest rates on hold after its latest meeting on Thursday and held off on any new recession-easing initiatives.
Japan's industrial output was up 1.6 percent month-on-month in March, the first increase in six months and another sign that the global slump may be easing.
British consumer confidence recovered to its highest level in a year in April as gloom over the economic outlook dissipated to levels not seen since the start of the credit crunch, a survey showed on Thursday.
The GfK/NOP consumer confidence barometer rose three points to -27 this month, its highest level since April 2008 and its third consecutive monthly rise.
However in a sign the economy is still mired in a deep recession, British house prices resumed their slide in April, data from mortgage lender Nationwide showed, suggesting last month's rise was no more than a blip in a downward trend.
Cadbury was the biggest blue chip faller, down 3.1 percent after its first quarter trading update disappointed, with underlying sales growth of 2 percent below analysts forecasts, Citigroup said in a note.
British Sky Broadcasting added 5.1 percent after its results beat forecasts with 80,000 net new customers in the third quarter.
Investors will eye U.S. Chicago PMI and core PCE data later.
Investors shrugged off uncertainty about swine flu. The World Health Organization said on Wednesday the world is on the brink of a pandemic, raising its threat level to phase 5.
