Hopes for a spurt in corporate activity and recovery in company profits have fuelled a revival by the FTSE 100 index, while shares in drinks firm Allied Domecq have lent muscle after an upbeat trading statement.
Turnover was slightly lower than average at one billion shares, with some players remaining on the sidelines given US markets are closed for the Labour Day holiday.
Market watchers said a pick up in merger activity added fresh impetus to a market already betting that an economic recovery will lift company profits.
Shares in mobile phone operator mmO2 rose 2.4 per cent after news France Telecom plans to buy the remaining stake in its mobile unit Orange at a hefty premium rekindled persistent takeover speculation surrounding the firm.
Mid-cap builders were buzzing after Wilson Connolly said it received a cash-and-share bid from larger rival Taylor Woodrow. Shares in Wilson Connolly jumped 10.8 per cent, while Taylor's shares advanced 9.3 per cent.
Shares in Allied Domecq climbed more than three percent after it reported strong underlying growth in trading profits and said its annual earnings were in line with expectations.
Strength in heavily weighted oil stocks BP and Shell lent further backbone, while among chemicals stocks, shares in ICI rose on hopes an economic pickup will boost demand for its products.
"The whole market is really strong today. People are buying up cyclicals," said one dealer.