The FTSE 100 index has reachest its highest level for more than two months in mid-day trade.
The increase was led by bullish reactions to results from International Power and Wolseley, and strength among oil stocks. Confidence of further good news on the US economy later today also helped the mood, dealers said.
By 12.23 p.m., the benchmark FTSE 100 index was up 21.7 points, or 0.4 per cent, at 5,321.6, after touching 5,331.6, its best intraday level since January 7th.
"It's too early to say we're out of the woods, and the oil price rise is not helpful, but the fact is that companies are definitely getting more confident," said Ms Hilary Cook, director of investment strategy at Barclays Stockbrokers.
Analysts said a rise in oil prices was not supportive for the overall economic recovery, but beneficial for oil stocks. The sector added eight points to the early FTSE rise as BP rose 1.2 percent and Shell was up 0.6 percent.
Pharmaceuticals stocks also added eight points to the FTSE, outweighing weak telecoms, who took off four points.
The US Federal Reserve is expected to leave interest rates unchanged late on Tuesday but to signal a change in stance to neutral from the long-running easing bias.
"The general feeling is they're going to be upbeat about the economy and prospects, but until you see it in black and white people are a bit cautious," one dealer said.