Gains in oils stocks BP and Shell, a recovery in financial stocks and a strong Wall Street helped to push the FTSE 100 share index 3.8 per cent higher this afternoon.
Building materials group Hanson was the biggest blue-chip riser with a 8.7 per cent gain, boosted by an 18 per cent profit rise from rival Aggregate Industries, clawing back a sharp fall on Friday after an earnings warning from France's Saint-Gobain. Aggregate Industries rose 10.8 per cent.
By 3:33 p.m., the FTSE 100 was up 152.2 points or three per cent at 4,168.8, with dealers predicting the benchmark index's 13.4 per cent rally from last week's 3,626-point six-year low could gather momentum.
Banks lent 32 points to the benchmark index, with HBOS leading the pack with a seven per cent gain as it extended last week's rebound in the wake of its strong set of results and positive outlook on Thursday.
Elsewhere in the financial services sector, insurer Prudential gained 6.3 per cent and Aviva, formerly CGNU, rose 5.3 per cent as the FTSE's gains helped to calm solvency margin fears.
Oils added 23 points to the leading index, while drugs gave a further 22 points, with AstraZeneca gaining 5.3 per cent. GlaxoSmithKline was up 4.5 per cent on an upgrade from Schroder Salomon Smith Barney to "outperform".
Shares in mining firm Anglo American fell 2.2 per cent to 835 pence, knocked back by a dip in the price of gold together with concern about a new mining charter aimed at giving blacks a bigger stake in the industry.
Sentiment in the sector was dented by news that Dutch bank ABN Amro cut its share price targets on mining stocks, including Anglo American.
Media firm Pearson rose 4.4 per cent after saying it remained on course for a strong earnings rebound this year, although it did paint a gloomy picture for advertising at its FT Group division.