The FTSE 100 has soared 1.98% this morning as HSBC more than doubled pre-tax profit to £7bn.
London's top index of shares has climbed 104 points to 5,362.10, with bank shares leading the way.
HSBC has advanced 4.47% to 674.9 after reporting a pre-tax profit of $11.1bn (£7bn), an increase of 121% compared with the first half of 2009.
This week, the big five banks should collectively report interim profits of around £8.4bn.
The news boosted other financials with Lloyds gaining 5.1% to 72.79p while RBS rose 5.08% to 52.50p.
Elsewhere, developer Hammerson advanced 2.09% to 396.50p after posting a 7% rise in half year profits to £70.2m.
Intertek Group is the biggest riser, up 4.12% to £16.42, as pre-tax profit grew 3.3% to £97.3m for the first six months.
In contrast, Randgold Resources fell 1.31% to £56.55 after revising production guidance for one of its gold mines downwards.
Sterling also rose this morning to a five and a half month high against a broadly weaker dollar ($1.5764) as stronger equities lifted investors' appetite for riskier currencies. The pound leapt to a near-four week high against the euro, to 82.86p, and a one month high against a basket of other currencies.
On Wall Street, an end of day rally helped the the Dow Jones recover lost ground as good corporate earnings were dampened by lackluster economic news.
The index dipped 0.01% to 10,465.94 after the Government's gross domestic product report showed economic growth to be slowing.
In Japan, the Nikkei 225 rose 0.41% or 38.93 points to 9,576.23, boosted by strong earnings reports.
Honda Motor Co climbed 4.02% to ¥2,818.00 after last week posting its best quarterly operating profit in more than two years.
