Britain's top share index was up 0.6 percent in early trade on Wednesday, extending Tuesday's advance driven by strength in banks and miners following signs of economic recovery in the United States.
At 0856 GMT the FTSE 100 index was 24.39 ponts firmer at 4,436.11, having closed 46.43 points, or 1.1 percent higher in the previous session.
Banks were boosted by Monday's strong rally on Wall Street after the biggest monthly jump in consumer confidence in six years raised hopes of an economic rebound.
"Banks will be the first beneficiaries of any signal an economy is turning around," said Howard Wheeldon, strategist at BGC Partners.
Barclays, HSBC, Lloyds Banking Group, Standard Chartered, and Royal Bank of Scotland added between 0.7 and 2.9 percent.
Australia and New Zealand Banking Group is raising A$2.5 billion ($1.95 billion) in a share sale, partly to fund a possible purchase of some of Royal Bank of Scotland's Asian assets.
Other financial stocks also saw good demand, with hedge fund manager Man Group up 4 percent, while insurers Legal & General and Aviva added 1.7 and 3.0 percent respectively.
Heavyweight miners also lent the FTSE their strength as metal prices recovered.
Rio Tinto, BHP Billiton, Anglo American, Antofagasta and Kazakhmys gained between 1.6 and 3.1 percent.
Chinese steelmakers, led by national champion Baosteel, will reject a 33 percent cut in iron ore prices agreed by mining company Rio Tinto and Nippon Steel, an industry source said.
OILS WEAK
Oil majors were a drag on the blue chips with crude prices just slightly firmer ahead of Thursday's meeting of the Organization of the Petroleum Exporting Countries in Vienna.
The global economy has strengthened enough to cope with oil at $75-$80 a barrel and that level will be hit soon as fuel demand picks up, Saudi Oil Minister Ali al-Naimi said on Wednesday.
Royal Dutch Shell fell 0.3 percent, BP lost 0.2 percent, and BG Group shed 0.7 percent.
Royal Dutch Shell is poised to announce a wide-ranging restructuring under its new chief executive, Peter Voser, the Financial Times said, with the changes started on Monday by the sudden departure of Linda Cook, head of the firm's Gas & Power division and a former contender for the CEO's job.
Explorer Tullow Oil dropped 1.3 percent after it said its Awaka-1 exploration well in Uganda has been plugged and abandoned after encountering water bearing sands..
Cairn Energy shed 1.8 percent as Goldman Sachs cut its rating to "neutral" from "buy" and suggested switching to mid cap peer Premier Oil which the broker upgraded to "buy". Premier Oil shares gained 3.9 percent.
Three FTSE 100 companies, Marks & Spencer, Cobham and Next, traded ex-dividend on Wednesday, together taking 1.06 points off the index.
Defensive stocks fared badly as some risk appetite returned, with British American Tobacco losing 1.3 percent and drug issues weak, led by AstraZeneca and Shire down 1.3 and 1.0 percent respectively.
On the economic front, the pace of decline in Britain's services sector looks set to slow over the next three months helped by falling costs, a survey by the Confederation of British Industry showed.
Investors are expected to focus on U.S. existing home sales data, due at 1400 GMT for any signs of life in the moribund housing market.
"I don't think there will be any good news," Howard Wheeldon said of the U.S. housing data, but he added that if it confirmed any signs of economic deterioration slowing it could underpin recovery hopes.
