Britain's leading share index rose 1 percent in early trade on Friday, snapping a three-day losing run as banks and miners led gainers ahead of U.S. jobs data.
By 0741 GMT, the FTSE 100 was up 48.61 points at 4.845.36. The UK benchmark is up 14 percent this quarter, on track for its best quarterly rise since the last quarter of 1999.
Miners were in demand, helped by the gold price, which hovered just below $1,000, taking a break after its strongest two-day performance since March as safe-haven demand stoked renewed investor buying.
Gold miner Randgold Resources was up 1.3 percent, while BHP Billiton, Anglo American, Xstrata and Kazakhmys put on 1.9-4.8 percent. Rio Tinto advanced 2.1 percent. The miner has suspended iron ore price talks with Chinese steel mills after its top salesman in China was detained, Australia Associated Press quoted Rio's iron ore boss as saying.
"It's really a question of people buying back into the market after three days of pullback. They are buying on the strength of the miners and also the financials," said Jawaid Afsar, a trader at Securequity.
He said Goldman Sachs' upgrade of its DJ STOXX 600 year-end target by nearly 11 percent to 260 and UBS lifting its forecasts for European corporate earnings for 2010 also improved sentiment.
U.S. non-farm payrolls figures and unemployment rate, due at 1230 GMT, will provide further insight into the state of the world's largest economy.
U.S. employers are expected to have eliminated 225,000 jobs last month, according to the median forecast of 81 economists polled by Reuters, down from 247,000 in July, while the unemployment rate is forecast to have inched up to 9.5 percent from 9.4 percent. British Finance Minister Alistair Darling said on the eve of a London meeting with his G20 colleagues that the global economy should recover next year but risks remain and countries cannot withdraw stimulus yet.
Banks, one of the biggest beneficiaries of government stimuli, were higher. HSBC, Barclays, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered added 1.6-2.9 percent.
UPGRADES
UBS increased its estimates of earnings per share (EPS) growth for European corporates for 2010 to 25 percent from 15 percent, citing continuing improvements in the economy.
"In the very near term we are fully aware that the equity market looks somewhat overbought and appears likely to have some form of modest correction," says Nick Nelson, UBS's European equity strategist.
"However, given our view on the bounce-back in earnings growth next year and increasing conviction that the economic cycle has turned, we feel the fundamental backdrop remains supportive."
Vodafone advanced 1.2 percent. The Financial Times said Deutsche Telekom had held preliminary talks with Vodafone, France Telecom and Spain's Telefonica over the sale of its T-Mobile UK unit.
Among other movers, Reed Elsevier gained 1.8 percent after Goldman Sachs added the Anglo-Dutch publisher to its "conviction buy" list.
Peer Pearson was among the top FTSE 100 fallers, down 0.5 percent after Goldman downgraded the Financial Times publisher to "sell" from "neutral".
