Britain's FTSE 100 gained 1 percent early on Monday as stock markets worldwide continued to rally on renewed optimism over the strength of the global economic recovery.
Led by commodity and financial stocks the FTSE 100 index was up 46.23 points higher at 4,897.12 by 0803 GMT, aiming for its fifth straight day of gains.
The UK benchmark rose 2.9 percent last week and is up 10.6 percent this year, after rallying 42 percent since hitting a floor in early March.
The U.S. Dow Jones Index closed 1.7 percent higher on Friday and Asian stocks jumped more than 2 percent on Monday, as upbeat U.S. housing data and optimistic comments from Federal Reserve Chairman Ben Bernanke spurred buying of riskier assets.
Miners headed the FTSE 100 leaderboard on stronger metal prices. Fresnillo, Lonmin, Vedanta Resources, Xstrata, Rio Tinto and Anglo American put on 2.6 to 5.1 percent.
"It looks like we're just going to keep riding this wave of positive sentiment," said Philip Gillett, a trader at IG Index.
"Everyone seems to think its going to hit a top and come off but it just doesn't want to do it," he added, citing the 5,000 level as the next milestone he expects the index to push towards.
There was more good news for the bulls in the shape of two surveys on the British economy, released overnight, which added to the positive view of the recovery.
UK business confidence has turned positive for the first time in two years, according to the Institute of Chartered Accountants in England and Wales (ICAEW).
Meanwhile, British service sector firms see a pick-up in business in the coming months, but some expect profits to fall amid continued downward pressure on prices, a Confederation of British Industry survey showed.
Oil producers were firmer as crude prices held around $74 a barrel.
BP, Royal Dutch Shell, BG Group and Cairn Energy added between 1.0 and 2.2 percent.
Financials also saw demand. Royal Bank of Scotland, Lloyds Banking Group and Barclays rose 2.3 to 4.6 percent.
RBS and Lloyds Banking Group have set up subsidiaries that buy the properties taken over by the bailed-out banks, in a bid to stave off billions of losses that would be incurred if the repossessed assets were sold in the open market, The Times said on Monday.
Life Insurers were on traders' wanted lists as well.
Legal & General, Prudential, Aviva, Old Mutual and Standard Life climbed 1.1 to 2.6 percent.
Friends Provident, a takeover target for Resolution, also added 0.7 percent.
DEFENSIVES DRAG
Perceived defensive issues, drugmakers and tobacco stocks, have lagged behind the broader market rally, with only a 25 percent gain since March.
GlaxoSmithKline and AstraZeneca dropped 0.2 and 0.1 percent respectively, while British American Tobacco and Imperial Tobacco shed 0.1 percent each.
Among individual fallers, security services firm G4S lost 4.6 percent after its first-half results failed to inspire, with Panmure Gordon highlighting lower-than-expeceted organic growth.
No domestic economic data is due to be released on Monday, and little is scheduled all week, though Friday's second reading of UK second-quarter GDP will be a focus.
The only U.S. data of interest on Monday will be the July Chicago Fed index.
