The FTSE 100 turned around the Monday morning blues to end in the black after reopening following its worst week in nearly a year.
Britain’s blue-chip index rose 42.5 points to end the day on 7197.88, after falling as low as 7132.98 earlier.
The top flight of companies managed to shrug off the morning’s worries after it opened down nearly 16 points, adding to a 270-point loss last week.
The index was pushed higher by British Airways owner International Airlines Group (IAG), which soared, with shares closing up 13.9p to 468.6p as more passengers chose the airline in September.
Markets in Europe had been posting modest gains as investors look forward to trade talks between the US and China, which are set to continue on Thursday.
Germany’s Dax rose 0.7%, while French index Cac was up 0.61%.
“The mood is one of cautious optimism even though it appears that China are not overly eager to strike a broad trade deal,” said David Madden, an analyst at CMC Markets.
He added: “It was reported the Chinese government are not willing to compromise on topics like industrial policy as well as government subsidies, but that’s not to say that progress can’t be made in the talks.”
US job figures from last week also helped traders feel a little better about the state of the economy, Mr Madden said.
Meanwhile, the price of international oil standard Brent crude shot up by more than 2% in the mid-afternoon, before giving back some gains, fetching 59.18 dollars per barrel.
Markets managed to eke out a win even after the British Retail Consortium accidentally released its retail sales figures for September a day early. Retailers had their worst September since records began in 1995.
Sterling was largely unchanged versus both the dollar and the euro, falling 0.1% against both. It was worth 1.23211 dollars and 1.12163 euros.
In company news, Marmite-maker Unilever said it would halve the amount of new plastic it uses as part of a major sustainability push.
The consumer giant, which also owns household brands such as Ben & Jerry’s and Dove, said it will cut more than 100,000 tonnes of plastic packaging out of its supply chain through new commitments to reduce waste.
Share in the firm were up 41.5p at the day’s end, to 4,843p.
The troubled maker of banknotes and passports, De La Rue, said on Monday it had appointed a new chief executive, Clive Vacher, to deliver a turnaround at the company.
It axed previous chief Martin Sutherland in May after a string of profit warnings at the firm following a failure to secure the contract to produce the UK’s new blue passports. It recently replaced chairman Philip Rogerson after pressure from activist investor Crystal Amber.
Shares closed up 4p to 228p.
The biggest risers on the FTSE 100 were International Consolidated Airlines Group, up 13.9p at 468.6p, NMC Health, up 70p at 2,571p, Centrica, up 1.8p at 71.46p, Hiscox, up 31p at 1,603p, and Fresnillo, up 12.6p at 674.8p.
The biggest fallers on the index were JD Sport, down 19.4p to 734.8p, Associated British Foods, down 40p to 2,165p, Informa, down 14p to 783p, Coca-Cola HBC, down 43p to 2,546p, and Hargreaves Lansdown, down 26p to 1,790.5p.