European equities were close to their best levels by midday with media giant Vivendi taking a leading role on news it is set to sign a €2 billion funding deal.
Shortly before 11 a.m. the FTSE Eurotop 300 index of pan-European blue chips was 1.69 per cent firmer. The index is now 13.6 per cent above its intraday five-year low hit on July 24th.
Much of the rally has been attributed to fund managers taking profits in bond markets as yields tumbled and shifting the money into equities.
Finland's Nokia has gained 26 per cent since July 24th and ING of The Netherlands has jumped 35 per cent.
In London, a host of blue-chip stocks brought the FTSE 100 up 65.2 points to 4395.2 this morning. ITV broadcasters Granada and Carlton led the surge, recording increases of 7 per cent and 8 per cent, respectively.
The groups, long touted as possible merger partners, plan to combine parts of their operations to cut costs and woo advertisers. Banks and telecoms were making a strong start to the week while engineering firm Invensys rose higher after completing a major disposal.
However, some investors questioned the sustainability of a rally that has seen markets rise over 10 per cent during the past month against a backdrop of a weakening global economy.