Britain's leading shares leapt 2.5 per cent on Tuesday taking their cue from a strong Wall Street as attack fears faded and strong results from Vodafone Group Plc pleased.
Telecoms giant Vodafone rallied 3.3 per cent, and helped lift other telecoms stocks, after its first-half earnings beat analysts' expectations.
Investors embraced tech names such as ARM Holdings which surged on the belief that tech, media and telecom (TMTs) shares would benefit from an economic recovery in the second half of 2002.
The FTSE 100 index closed 130.9 points, or 2.5 per cent firmer at 5,277.1, where strong chart support lies. The heavily weighted sectors led the bounce after weak performances on Monday, with banks lifting the FTSE by 32 points, telecoms and oil stocks by about 23 points each.
The market is in the mood to go up and take scraps of comfort from company earnings statements, said Paul Niven, investment strategist at Royal Sun Alliance.
The techMARK index of technology media and telecom stocks leapt 5.2 percent to 1,526.6, its highest close in 13 weeks.
Investors were also heartened by news from Afghanistan, where anti-Taliban fighters captured the capital, Kabul.
Dealers said strong liquidity in the market would continue to underpin the rally through to year-end with some brokers suggesting technology shares would lead the ascent.