The FTSE 100 Index was up 1%, or 56.7 points at 5,685.8 today amid improving signs across the Atlantic, although analysts warned against being “over excited” about the rally.
US data on housing starts showed home construction increased by a better-than-expected 6.9% between May and June to an annual rate of 760,000 – the highest level in nearly four years.
Shares in under-fire Olympic security firm G4S enjoyed a reprieve as bargain-hunters bought into the battered stock.
G4S closed 4.9p higher at 244.9p, having fallen sharply over the previous four sessions.
More Than firm RSA Insurance recovered early session falls seen after it revealed a £50million hit from more than 6,500 UK weather-related claims since June.
It also revealed a £35million impact from two earthquakes in Italy in May and said its combined operating ratio, which shows claims and expenses as a percentage of premium income, had been affected. Shares were later 0.6p higher at 108.9p.
Outside the top flight, Homeserve rose by 12% at one stage amid newspaper speculation that the home repair and insurance business is in the sights of potential private equity suitors.
Homeserve denied it is in offer talks but shares were still 20p higher at £1.87 on hopes that a £1billion deal could be in the pipeline.
Equipment rental firm Speedy Hire rose 2%, or 0.5p to 23.8p after it secured a £40million contract to work on a major oil drilling project in the Middle East.
But there was grim news for shareholders of climate change consultancy AEA Technology. The debt-laden company warned its shares were worthless, sending the stock down 84% to just 0.04p.
David Barclay, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Aggreko gaining 3.48% to £19.95, FirstGroup adding 2.74% to 206.3p and Stagecoach Group up 1.68% to 283.65p.
Hunting closed 0.96% lower at 724.75p and Weir Group weakened 0.73% to £14.91.