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London - Strength in banks and commodity stocks pulled Britain's leading share index higher by midday on Monday, as investors focused on fundamentals and shook off fears about the impact of high oil prices on the global economy.
At 1206 GMT, the FTSE 100 index was up 45.53 points, or 0.8%, at 6 035.92, having shed 0.2% on Friday.
"We have seen investors come in to buy stocks after a somewhat aggressive sell off in later trading in Friday," said Joshua Raymond, market strategist at City Index.
"(However) The FTSE needs to break through current resistance between 6 040 - 6 050 before the UK Index can target the 6 100 level again," Raymond added.
Banks were the best sector performers thanks to strong gains from global heavyweight HSBC, up 1.8%.
HSBC may move its headquarters from London to Hong Kong because of what it sees as high levels of tax and red tape in the UK, the Sunday Telegraph said.
Part-nationalised Lloyds Banking Group, however, shed 0.1%, unsettled by a report in The Guardian which said the Liberal Democrats backbench Treasury Committee has backed a radical plan to distribute the government-owned shares in both Lloyds and Royal Bank of Scotland to the public.
"Aesthetically it all sounds great, but is wholly impractical," said David Buik, senior partner at BGC Partners.
Energy issues also gave the blue chips a boost, led by BP up 1.7%, helped by a batch of brokers raising estimates across the sector based on higher oil prices.
Brent crude jumped to $118 a barrel on Monday as Libyan leader Muammar Gaddafi attacked rebel-held towns, stoking fears of an imminent civil war in the country.
Precious metal miners benefited as gold rose to near record highs, and silver jumped to its highest level in more than three decades on safe-haven buying on the unrest in Libya, with Mexican silver miner Fresnillo up 2.5%.
Wall street eyed
US stock index futures, were higher, signalling a recovery on Wall Street after big falls on Friday, with some takeover activity helping sentiment.
Luxury goods firms got a boost after France's LVMH launched a €3.7bn takeover bid for Italy's Bulgari, paying a premium of almost 60%.
Burberry was in demand on the news, up 3.5%.
Among individual stocks, Intertek was the top blue-chip gainer, up 4.5% as the testing firm posted an 11% rise in full-year profit and said it would acquire safety services provider Moody.
Inmarsat was by far the biggest FTSE 100 faller, shedding 10.6% to touch its lowest since late 2009, as the satellite operator's results were below market expectations and it signalled a difficult 2011.
Rolls-Royce slipped 0.2% after the engineer confirmed it is talks with German automotive group Daimler to make a joint bid for heavy diesel engine maker Tognum.
