Britain's leading shares rose 1.3 percent on Thursday, lifted by strength in energy and mining shares as investors world-wide clung to hopes of a US interest rate cut. BG Group led the rally, rising more than 4 percent and taking heart after crude oil prices spiked more than 2 percent in the last session.
Shell climbed 2.3 percent and rival BP added 1.6 percent. Miners also forged higher, helped by copper prices. BHP Billiton gained 2.7 percent and Xstrata rose 2.4 percent. The FTSE 100 ended 79.8 points higher at 6,212. Major European stock indexes outperformed more modest gains on Wall Street, which edged higher after opening in the red.
"The FTSE is great. Its behaved so well, especially today, I think it's amazing", said Les Ames, a trader at WH Ireland. "The London market does exceedingly well and it's at times like this that our strength is actually shown."
UK investors took heart after comments from US Federal Reserve Chairman Ben Bernanke increased hopes of a rate cut. He said in a letter released on Wednesday that the Fed was "prepared to act as needed" to ensure credit market troubles do not adversely affect the economy.
Banks were standout gainers, shrugging off a lower start to the day triggered by fears about the sector's exposure to the US subprime lending crisis. Standard Chartered added 2.8 percent, while Royal Bank of Scotland was up 0.9 percent.
Rate-sensitive property stocks rose on the Bernanke comments, with Liberty International up 3.8 percent, while Hammerson and Segro also rose.
On the economic calendar, investors were little affected by data earlier in the session, which showed UK mortgage approvals at an above-forecast 115,000 in July.
Among stocks reporting, pan-European electrical goods retailer DSG International lost 1.6 percent to top the FTSE 100 losers, as traders cited concerns over future growth despite the group reporting that like-for-like sales grew in the 16 weeks to August 18.
In other news, Diageo, the world's biggest alcoholic drinks group, gained 2.4 percent after it posted a 13 percent rise in annual earnings and raised its target for future growth as Europe recovered and the United States saw robust trading.
Services group Rentokil Initial added 1.4 percent after Merrill Lynch increased its price target to 182 pence from 174 pence and reiterated its "buy" recommendation. Among midcaps, Serco gained 5.1 percent after it raised its full-year earnings outlook as it posted a 16 percent rise in first-half profit in strong UK markets.
Bingo, casino and online gaming firm Rank rose 8.8 percent after saying it had seen a 4.4 percent decline in like-for-like revenues in its English bingo clubs since the smoking ban while its Scottish clubs had clawed back revenues.
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