UK stocks recouped more than a week's losses on Wednesday, plucked from levels near three-month lows by Alan Greenspan's assertions of a sustainable US expansion and key companies' reports of healthy growth.
The FTSE-100 index closed up 37.9 points, or 0.87 percent, at 4,377.3, its highest level since July 9.
"Hopefully now people will start to focus on positive fundamentals in the market at the moment," said HSBC strategist Robert Parkes, whose bank continues to call the FTSE at 4,700 at the end of the year.
"I think we see that coming through in terms of the corporate announcements. We have had a few disappointments," he added.
The close was still shy of intraday highs, and dealers said that with corporate news pouring thick and fast on both sides of the Atlantic, bad surprises could still be in store.
"Something like 55 S&P 500 companies are reporting today. We are still slightly nervous for the US reporting season. Even if they meet expectations, the guidance might not be so good for the rest of the year," one dealer said. "It's slowly, slowly at the moment."
Bradford & Bingley rose 3.3 percent, sparked by rival mortgage bank Northern Rock's forecast of industry consolidation. Northern Rock rose 2.6 percent.
Bradford & Bingley led a broad rise in financial stocks after US Federal Reserve Chairman Greenspan said the US economy was in a phase of stable expansion.
Some reporting companies - like retailer GUS, up 3.5 percent - did their part for the rising FTSE, while others - like Cadbury Schweppes, which reported sales growth at the low end of its target and lost 3.9 percent, dragged on the index.
Even within some sectors, like consumer-oriented industries, the outlook seems mixed, Parkes said.
"I think you might well get winners and losers emerging within sectors, because competition is intense, but I don't think that's necessarily a negative for the broader market."
Mm02 slipped 0.8 percent by the close despite reporting strong UK subscriber growth and raising its UK market guidance.
Nomura reiterated its "neutral" stance on mm02: "We note the CEO's confirmation that competition is intensifying, and believe there is better value elsewhere in the sector," Nomura said.
Vodafone was slightly better, up 0.9 percent, and traders said it may have had a boost from switching out of mm02.
Fixed line operator Colt Telecom powered ahead 12 percent after its second quarter core earnings met forecasts, shifting attention from its July 1 warning that profits could decline from last year's.
The share is still nearly 40 percent lower than it was before the warning.
British Airways, up 4.7 percent at 246-1/2 pence, rose with other global carriers after it quietly pointed to a return of business and Smith Barney, the research arm of Citigroup, applauded a target date for improved profit margins.
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