Speculation of M&A in various sectors, as well as rising precious and base metals miners, drove the FTSE upwards by 1.5% to 5,303.72 points by 2.15pm.
In the US, early trading saw the Dow Jones index up 0.1% at 10,014.72 points, after ending its worst August for nine years yesterday as investors feared for economic prospects.
By the afternoon, Germany's Dax was 1.2% higher and France's Cac 40 had climbed 1.9%.
Among metals, gold rose 2.2%, copper 2.5%, and nickel 1.6%. Only silver had fallen, by 0.8%.
The risers helped propel copper miners Kazakhmys and Antofagasta up 3.9% and 3.2% respectively, and gold and silver miner Fresnillo up 2.8%.
However, they were all beaten by TUI Travel, which jumped 5.8% despite going ex-dividend. Reports from Germany suggested majority owner TUI AG will discuss buying the 45% of the company it does not already own at a 9 September board meeting.
Cable & Wireless Worldwide also climbed 5.6% on rumours of a bid from US rival AT&T.
Miner Xstrata, mentioned by some as both a potential acquirer of smaller rivals and a potential bid target from overseas, rose 3.5%.
