Banks such as Lloyds and Barclays pushed the FT-SE 100 Index 1.3% higher by 9am after a report said global economies are recovering from recession.
The International Monetary Fund raised its forecast for global growth this year, to 4.6%, more than the 4.2% initially expected, the Washington-based organisation said today in a report.
The US and Canada are leading the recovery, followed by Europe, which still needs more measures to boost its economies, the IMF said.
The Fund warned that "uncertainties surrounding sovereign and financial sector risks in parts of the euro area could spread more widely, posing difficulties for both financial stability and the economic outlook."
The FT-SE 100 rose 67 points to 5,083 points. Lloyds added 2.5%, or 4.4 pence, to 60.7p, while Barclays added 3.3%, or 9.6p, to 301p.
In France, the CAC Index rose almost 1% to 3,516 points, while Germany's Dax gained 0.5% to 6,0267 points.
The euro slightly gained against the US dollar, trading at $1.264, reflecting the IMF warnings about the persistent economic dangers in the Eurozone.
"While we remain cautiously optimistic about the pace of recovery, there are clearly dangers ahead," said Olivier Blanchard, the IMF's chief economist. "How Europe deals with fiscal and financial problems, how advanced countries proceed with fiscal consolidation, and how emerging market countries rebalance their economies, will determine the outcome."
