Leading shares are holding on to their early gains as the first day of the new trading quarter gets off to a good start.
Commodity companies are among the main risers, with metal prices up on the back of some reasonable Chinese manufacturing figures, and oil up more than $1 a barrel after a higher than expected drop in US inventories and disruption following attacks in Nigeria.
And despite yesterday's gloomy UK GDP figures, there were some brighter signs for the economy. The UK purchasing managers' survey for June and the service sector output numbers both came in better than expected. James Knightley at ING Bank said:
"The UK manufacturing sector's purchasing managers' index has further boosted hopes that the UK will soon exit technical recession. The headline index rose to 47.0 from 45.4 in May (consensus 46.4), which is a level consistent with positive GDP growth.
"The official monthly service sector output number has also been released and shows the smallest monthly fall since October last year. Add in the likelihood of increases in both the construction and service sector PMIs tomorrow and on Friday and it looks as though we could see positive GDP in 3Q09. However, there are concerns about how sustainable this is given ongoing weakness in consumption, and how much of the rebound is technically driven by restocking inventories."
Investors will be watching this afternoon's ADP private sector employment report from the US, ahead of the key non-farm payroll figures due tomorrow.
Overall, the FTSE 100 is now 58.10 points higher at 4307.31. Miner Vedanta Resources is still the biggest riser in the index, up 105p to £13.93, with Xstrata adding 32.4p to 689.7p. BP is 7.8p better at 485.6p and Royal Dutch Shell A shares have risen 29p to £15.47.
Gilts have moved higher after a successful £5.25bn sale of five-year securities, which was covered 2.56 times.
Back with equities, property company Land Securities was lifted 5.25p to 476.5p by news that it had sold the Portman House building on Oxford Street in London to a Libyan state-based company for £155m.
Lower down the market, Greg Hutchings' hopes of repeating his success at Tomkins - which he turned from a small engineering group to a conglomerate encompassing Smith & Wesson guns and Hovis bread - with industrial minnow Lupus Capital have come to nothing.
The entrepreneur - often labelled the epitome of 1980s capitalism - is stepping down from Lupus with immediate effect after the company renegotiated its banking facilities. Lupus said trading conditions were still tough, and its shares have fallen 5.5p to 17.25p.
Hutchings has already disappeared from the Lupus list of directors, which now consists solely of the new board.
