The Footsie-100 Index has closed up 146.1 at 4240.5.
News of a rescue deal for the Brazilian economy and another strong start to trading on Wall Street lifted spirits in London.
City watchers said a $30 billion IMF rescue deal for Brazil had reassured traders.
Shares in the high-street banks, weighed down recently by fears over rising bad debts, climbed with Royal Bank of Scotland up 97p to £15.40.
HBOS rose 34p to 718p, HSBC moved up 27p to 745p, Barclays rose 9p to 448p and Standard Chartered closed 29p higher at 699p.
Corus, which is merging with Brazilian steelmaker CSN, rose 1p to 55p, while mining firm BHP Billiton moved up 10.5p to 291.5p.
GKN also pleased the City by sticking to forecasts for the current year despite a slight fall in underlying half-year profits.
GKN, which supplies the automotive and aviation markets, said actions taken to tackle the downturn would pay off and its shares rose 14.5p to 271.5p.
GlaxoSmithKline and AstraZeneca also made headway, rising 94p and 153p to end the day at £13.59 and £23.55 respectively.
But insurer Royal & Sun Alliance plunged 30.75p to 112p after reporting sharply lower operating profits because of costs relating to the September 11th attacks.
PA