The FTSE 100 Index rose more than 2%, or 123.9 points to 5384.1 today after the European Central Bank left interest rates on hold at 1% but hinted that a cut could still be on the cards if needed.
Traders remained optimistic that the Bank of England will tomorrow opt for more quantitative easing measures to boost the UK’s recovery and that the US Federal Reserve could also signal more money printing.
The strong session in London was partly due to a rebound after the jubilee celebrations, analysts said.
Financial and mining stocks enjoyed a strong run after taking a battering last week, with Barclays adding 8%, or 14.3p to 187.8p, Man Group ahead 5.4p at 80.9p and Vedanta Resources 80p higher at 963.5p.
Investors may have been thrown by Royal Bank of Scotland’s share price, which shot up from just under 20p on Friday to 213.2p as a result of a share consolidation authorised by the bank’s annual meeting last week.
Diageo was also on the risers’ board, up 4%, or 64.5p at £15.81 after it unveiled plans to invest £1billion in Scotch whisky production.
Vodafone sank to the bottom of the shares index after it confirmed that it was in talks with Telstra which could lead to it selling its New Zealand subsidiary, TelstraClear, for an estimated £190million-£255million. Shares fell 3%, or 4.7p to £1.69.
David Barclay, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Premier Oil among the risers after its shares gained 7.36% to 353.15p.
Elsewhere north of the border, Cairn Energy rose 5% to 289.95p and Standard Life lifted 4.31% to 212.8p.
STV Group shed 4.04% to 95p and Melrose Resources was off 2.11% at 90.375p.