London's top flight index recorded its strongest week since 2011 as it remained upbeat following calls by Bank of England Governor Mark Carney to slash interest rates over the summer.
The FTSE 100 Index was 73.5 points higher at 6577.83, as it made a remarkable recovery since the end of last week when more than £50 billion was wiped off its value following the Brexit vote.
London's premier index was also buoyed by Chancellor George Osborne's decision to abandon his target of achieving a budget surplus by 2020.
Mr Osborne said the UK economy was bracing itself for a "significant negative shock" following its decision to leave the European Union and the Government had to be "realistic" about reaching a surplus by the end of the decade.
On the currency markets, sterling continued to struggle following Mr Carney's signal to cut the cost of borrowing from 0.5% in the coming months.
The pound was marginally down against the dollar at 1.328 US dollars, while the pound was down 0.5% against the euro at 1.19 euro.
In Europe, Germany's Dax was up 0.9%, while the Cac 40 in France climbed 0.8%. Across the Atlantic, the Dow Jones Industrial Average was also on the up, rising 0.3%.
London's benchmark Brent Crude was 0.6% higher at 49.99 US dollars (£38) a barrel, despite falling at the beginning of the session as it focused on oversupply with Nigeria and Canada stepping up production following outages in recent months.
In stocks, housebuilders and precious metal stocks were in the ascendency, with silver miner Fresnillo dominating the biggest risers, up 7% or 116p to 1,760p.
Charles Church-Persimmon was 6.4% higher, or 93p to 1540p, and Berkeley Group rose 5% or 131p to 2654p.
Tony Cross, market analyst at Trustnet Direct, said: "Surging precious metals prices and speculation that silver in particular still has further to go has pushed Fresnillo to the top of the board, up almost 7% on the day, but housebuilders have also found some renewed favour as opinion here turned positive.
"Although cheaper borrowing costs and the ongoing shortage of housing can't be ignored, this has to be countered against the idea that consumer confidence and mortgage availability could still be scuppered in the wake of the vote. For now however, the optimists are winning out."
Shares in Trinity Mirror were up despite the newspaper publisher saying it would take "mitigating actions" to support profits in the wake of Britain's decision to leave the European Union.
The publisher behind the Mirror newspaper did not specify what actions it would take, but the announcement comes days after the firm launched a consultation with staff over potential job cuts.
However, shares rose 3.5p to 91p as some analysts expect the company to benefit from a newspaper circulation boost following the Brexit vote.
Budget airline easyJet was also ahead after it revealed it was drawing up plans to potentially move its legal headquarters out of the UK and into Europe as the business fallout from the EU referendum continues.
The budget airline will lobby British and EU governments to retain the status quo in the aviation market, which allows operators to fly across the continent in a deregulated environment.
However, if this cannot be achieved it will look at options including setting up a new entity in Europe or moving its legal home from Luton to a European city.
Shares climbed 6p to 1092p.
The biggest risers on the FTSE 100 index were Fresnillo up 116p to 1760p, Persimmon up 93p to 1540p, TUI up 51.5p to 903p, and Johnson Matthey up 156p to 2957p.
The biggest fallers were Sage Group down 20.5p to 625p, Travis Perkins down 21p to 1453p, Capita down 12p to 950p, and Royal Bank of Scotland down 1.9p to 169.7p.