The FTSE 100 Index climbed more than 2%, or 132.1 points to 5737.7 today amid optimism that the US can duck automatic tax increases and spending cuts.
Barclays topped the risers board – up 15.55p at 249.75p – after investment bank Goldman Sachs introduced a buy rating on the stock and said it was confident about the troubled bank’s ability to achieve substantial value for shareholders.
Elsewhere in the banking sector, HSBC lifted 22.5p to 618.3p after confirming talks over a deal to sell its stake in China’s Ping An Insurance.
BP shares improved 15p to 431.6p after a report said it was deciding whether to commit £3.7billion to a massive stock buy-back to revive its flagging share price and thwart possible bid suitors.
A 2% surge in the price of Brent crude to $111 a barrel amid escalation in the conflict in Gaza was also responsible for some of BP’s rise.
Improved economic optimism in the US meant miners Eurasian Natural Resources and Randgold Resources lifted 12.5p to 272.1p and £3.05 to £66.55 respectively.
Online supermarket group Ocado topped the FTSE 250 Index, with a jump of 24%, or 14.45p to 75p after investors backed a share placement and lenders including Barclays and HSBC agreed to extend its £100million loan facility until July 2015.
Outsourcer MITIE fell 3%, off 10p to £2.80 after it said pre-tax profits fell 13% to £37.7million due to £4.8million of restructuring and redundancy costs.
Aga Rangemaster jumped 11%, or 6p to 62p after it said trading for its major brands had shown encouraging signs, driven by the launch of new ranges, while Majestic Wine rose 11p to £4.76 after a 4% rise in half-year profits.
Carrie Keenan, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Hunting gaining 4.26% to £7.46 and Royal Bank of Scotland 3.57% higher at 287.3p.
Wolfson Microelectronics lost 3.78% to 180.125p and Parkmead Group fell 1.79% to 13.75p.