Britain's FTSE 100 index scored a broad-based rally on Friday to close at its highest level in about one month, led by banks including Barclays and Royal Bank of Scotland which were boosted by the outlook for US rates.
US jobs growth came in nearly as expected and boosted expectations that the Federal Reserve was likely to keep rates steady.
"The US rate outlook is helping banks, but they have also been among the biggest laggards within financials in several weeks, so they are playing catch-up," said one trader.
"As the market gets better, it is harder and harder to find value, and with banks having been underperformers, people are beginning to look at them," he said.
Barclays rose 2.4 percent, RBS gained 0.7 percent and Northern Rock added 1.3 percent. Among other financials, insurer Legal & General was up 3 percent and Old Mutual advanced 2 percent.
The FTSE index ended 0.7 percent stronger at 5,949.1, its highest close since July 28. The index rose more than 1 percent on the week and has gained 6 percent so far this year. European stocks ended higher and Wall Street also advanced.
Miners, which have been supported by merger speculation and bullish brokerage reports on the sector, also rose. Xstrata led the way, up 3 percent, and Anglo American rose 2.6 percent.
Among other gainers, Centrica rose 1.8 percent, boosted by renewed talk that Russian energy giant Gazprom might for the UK utility group, although a spokesman for the Russian company denied the bid talk.
"I can only suppose that in the lack of real news, people start inventing rumours," said Gazprom spokesman Sergei Kupriyanov.
Other utility stocks also gained, with Drax Group, up 2.8 percent and British Energy up 3 percent.
Strategists said concerns over global economic growth were affecting markets but robust corporate profits supported valuations.
"Markets have just become very data dependent at the moment because there's this view the US economy is slowing down and maybe US interest rates have peaked but we're still getting strong growth in Europe, so the overall global picture is mixed," said Chris Iggo, a strategist at Axa Investment Managers.
"The big question is if there is going to be an economic slowdown, how severe is it going to be and is it going to impact significantly on corporate earnings?"
"The equity market is still taking a fairly rosy view of things and expecting profits to hold up quite well, even if growth is slowing. Unless we get some really weak economic data, that view will prevail for a while and it should mean that markets grind higher."
Among gainers, property firm Hammerson rose 2.75 percent to 1,287.9 pence as UBS raised its price target to 1,400p from 1,080p, while retained its 'neutral' rating. Analysts said Hammerson is set to report a 9 percent rise in first-half net asset value on Monday.
Oil shares were little changed as US crude oil prices slipped below $70 a barrel.
Among midcap stocks, British speciality chemicals company Croda jumped 13 percent as a bullish research note from Morgan Stanley greeted its relisting following its take-over of rival Uniqema.