The FTSE 100 share index was up 0.4 per cent this morning.
The FTSE 100 was up 24.3 points, or 0.38 per cent at 6,339.8, earlier this morning.
Scottish & Southern Energy gained more than 2 per cent as traders said there was speculation that German power giant E.ON might look elsewhere after giving up on its attempt to buy Spain's largest utility Endesa.
International Power also added more than 2 per cent.
Shares in insurer Resolution were up 1.6 per cent after it beat market forecasts with an 18 per cent rise in its embedded value at the end of 2006 and said it planned to boost its 2007 dividend, but would continue to look for acquisitions.
Oil stocks also lifted the FTSE index. BP added 0.5 per cent, and Royal Dutch Shell also rose, despite US crude oil prices dipping as the market was soothed by the potential for a diplomatic solution to a stand-off between Britain and Opec producer Iran.
Investors are awaiting the Bank of England's key decision on borrowing costs on Thursday. UK interest rates are expected to stay on hold at 5.25 per cent, but economists widely expect a rise to come in May.