Hopes for continued recovery, given a fillip by Friday's upward revisions to growth figures both in the US and the UK, were buoyed by fresh figures showing a healthy increase in consumer spending in America.
With the mood also benefiting from the removal of uncertainty after the Federal Reserve's announcement on tapering last week, the FTSE-100 Index climbed more than 1%, or 72 points, to 6678.6, the fourth day in a row of gains.
Frankfurt's Dax and Paris's Cac 40 notched up gains too. On currency markets, sterling was flat at 1.64 US dollars and 1.19 euros.
The positive mood in equities has been buoyed by hopes about the US recovery as well as the UK figures from last week showing the economy is now 2% below its pre-crisis level in 2008 rather than 2.5% as previously thought.
But a number of high-profile retail stocks have fallen recently on fears that the sector could be left with a profits hangover after heavy discounting in the run-up to Christmas.
Marks & Spencer, which reduced some prices by 30% over the weekend, initially headed downwards, amid the buoyant wider market shares ended 2.1p up at 447.1p.
On a shortened fallers' board, Sports Direct International dipped 0.5p to 717.5p.
Outside the top flight, Carphone Warehouse fell 6.4p to 271.6p, a drop of 2%, while JD Sports Fashion tumbled 10%, or 150p, to 1344p.
Chip designer ARM Holdings was the biggest riser in the FTSE 100 Index after tech giant Apple reached a deal to bring the iPhone to China Mobile, the world's biggest phone carrier.
ARM shares were up 42p to 1110p, as its technology helps power Apple's iPhone and iPad.
There was a disappointing debut for Royal Mail. Shares were 11p lower at 580p, though the stock remains more than 75% higher than its flotation price of 330p in October.
Madame Tussauds owner, Merlin Entertainment, which joined the FTSE-250 Index as part of the same reshuffle, fell 4.3p to 361.7p.
Elsewhere, shares in Hovis and Mr Kipling firm Premier Foods slid 5p to 125.5p following its confirmation that it is considering a £300 million rights issue as it looks to tackle a debt mountain of around £1 billion.
The biggest FTSE 100 risers were ARM Holdings, up 42p to 1110p, Aberdeen Asset Management, up 14.8p to 480.1p, Carnival up 75p to 2464p and Intertek up 80p to 3051p.
The biggest FTSE 100 fallers were Royal Mail, down 11p to 580p, Ashtead down 9p to 764.5p, Burberry down 6p to 1459p and Randgold Resources down 14p to 3751p.