The FTSE share index rose sharply this morning after a late surge on Wall Street.
It was boosted by a recovery in banks as bad debt fears faded and by news that drugmaker GlaxoSmithKline had won regulatory approval for one of its drugs.
Shares in ITV broadcaster Granada rose 6.8 per cent to 71 pence after it said it was in merger talks with rival Carlton Communications.
Trading activity across the index was brisk, with 517 million shares changing hands by mid-morning.
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But dealers said many investors may stay on the sidelines ahead of some key US data this afternoon, including September retail sales, and earnings news from US industrial giant General Electric.
PA