The FTSE 100 ended up 50.28 points, or 0.9 per cent, at 5,433.73, the highest close since 30 April. The blue chip index has gained around 6 per cent so far this week, recovering most of last week’s 7.7 per cent fall.
Miners rallied along with stronger metal prices, with key base metals prices rising 0.9 to 3.5 per cent. Eurasian Natural Resources, Fresnillo and BHP Billiton added 3.2 to 3.8 per cent.
Gold hovered near its all-time high, helping gold miner Randgold Resources to add 1.8 per cent.
The sector remains almost 14 per cent off 2010 highs hit in late March, as concerns over potential China monetary tightening and euro zone debt issues have weighed on demand.
“Sentiment remains fairly fragile with concerns about sovereign risk never far away from the markets gaze,” said Michael Hewson, an analyst at CMC Markets.
Investors were relieved by measures from Portugal and Spain to trim their budget deficits, offering reassurance the Eurozone was addressing deep-rooted fiscal problems.
Energy shares also rebounded with Royal Dutch Shell and BG Group up 1.1 and 0.4 per cent respectively.
BP rose 1.1 per cent as the energy giant moved forward with untested solutions aimed at containing the spreading oil spill from a ruptured well in the Gulf of Mexico.
Bullish results from Britain's leading corporates helped improve sentiment. BT Group jumped 10.8 per cent after full-year results beat market expectations.