Britain's top share index rose 2.2 percent in early trade on Tuesday to touch a near four-month high, taking its cue from a rally in the U.S. markets with heavyweight commodity-related stocks and banks leading the way.
By 0729 GMT, the FTSE 100 was up 93.85 points at 4,337.07, catching up with gains from its continental European peers the previous session when it was closed for a public holiday.
The UK index is down 2.2 percent for the year but has rallied 25 percent from a six-year low hit on March 9. Banks were the best performing sector, lifted by gains among U.S. peers overnight, as investors bet banks' capital shortfalls may be manageable. U.S. housing data also fuelled hopes the recession was easing. Barclays, Royal Bank of Scotland, HSBC, Standard Chartered and Lloyds Banking Group rose between 3.3 and 13 percent.
"Justifiable though the market recovery is, there are some huge bumps ahead. Thursday may be one of those big bumps, in the devil in the details of what U.S. banks require," said Howard Wheeldon, senior strategist at BGC Partners.
"Between now and then, the market may do better to sit on its hands."
A source familiar with official talks said U.S. regulators had deemed that about 10 of the 19 U.S. banks being stress tested would need to raise more capital. The banks would be briefed on Tuesday on the final results which will be published on Thursday.
Within the financial sector, insurer Aviva soared 6.2 percent, while its peers Prudential, Standard Life and Friends Provident added 1.4 to 5.7 percent. Legal & General missed out the rally on a Banc of America-Merrill Lynch downgrade to "underperform". The stock was flat.
Miners rose on firmer metal prices. BHP Billiton, Rio Tinto , Kazakhmys, Vedanta Resources, Anglo American and Antofagasta advanced between 4.1 and 12 percent.
Xstrata surged 7.5 percent after the miner posted a 7.7 percent rise in first-quarter coal production, its most profitable commodity, but output of many other products declined amid weak demand and low prices.
Oil producers were also higher as crude prices traded above $54 a barrel. BP, Royal Dutch Shell, BG Group and Tullow Oil put on between 1.1 and 3.2 percent.
