UK stocks ended higher on Monday, starting the week on an upbeat note after recent steep losses as confidence returned in the mining and energy sectors and as broker notes boosted media stocks Reuters and WPP.
Retailer Marks & Spencer also gained, up 2.3 percent as analysts expressed optimism ahead of its second-quarter trading update on Tuesday.
"M&S is amongst the very few UK retailers expected to deliver earnings growth this year," Citigroup analysts said in a note. "Furthermore, the cost and margin package combined with potentially better revenue trends could result in earnings upgrades an even rarer proposition in the sector."
But the cheery mood among much of the market was missing in the Internet gaming sector, where shares in Empire Online slumped by a third after it said growth in the online poker market was nearly flat during the third quarter, raising concern across the industry. PartyGaming and 888 lost over 11 percent each.
The FTSE 100 closed up 12.2 points at 5,374.5 as investors were attracted back into the market after concerns about US inflation and aggressive interest rate rises sparked steep falls last week. The index is still some way off the 5,500 level it closed above a week ago but analysts said the market should resume its upward trend.
"There was a bit of an overreaction to what was a little bit of sabre-rattling by the Federal Reserve," said Stuart Fraser, investment director at private client stockbroker Brewin Dolphin. "A bit of sense has come back. People are viewing the fact that equities are still okay, priced relative to bonds."
Resource stocks, which were among the hardest hit in last week's sell-off, topped the blue chip gainers list as copper prices hit fresh record highs and as gold traded at an 18-year peak. Antofagasta finished up 2.8 percent and Xstrata added 2.6 percent.
Energy stocks also continued to recover from recent falls, with oil major BP finishing up 1.5 percent.
The media sector was another buoyant area on the back of positive broker comments. Advertising agency WPP increased 2.3 percent after Citigroup upgraded it to "buy". News and information group Reuters closed 2.25 percent higher as CSFB noted a trading statement was due on October 27 and made positive comments while repeating an "outperform" rating on the stock.
In the mid-cap arena, telecoms equipment maker Marconi stood out with a 9.3 percent gain on speculation that Sweden's Ericsson may buy it. Marconi declined to comment on what it said was just a stock market rumour.
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