But it was a less than spectacular rally as the FTSE 100 Index inched ahead by 17.8 points to 6690.2, more than 2.5 per cent below its closing level last Friday.
Jitters ahead of the forthcoming US reporting season combined with renewed fears about the health of the European banking sector have been sending stocks lower.
The FTSE 100 has slumped to its lowest point since April, with airlines and mining stocks among the casualties.
On currency markets, sterling which has been at near-six year highs - edged lower but remained just above 1.71 US dollars and just below 1.26 euro. In London, airline stocks, knocked during the week by a profits warning from Air France-KLM, saw further turbulence as British Airways owner International Airlines Group (IAG) announced it was cutting up to 1,581 jobs at Spanish carrier Iberia.
IAG said it was part of plans for "permanent structural changes across the airline enabling it to grow profitably in the future". Shares fell one per cent, or 3.2p, to 328.5p while low-cost rival easyJet lowered 6p to 1483p.
Top of the FTSE 100 risers' board was Shire, the pharmaceuticals company being pursued by AbbVie.
Shares rose nearly six per cent, or 270p, to 4870p after it was reported that the Hampshire-based firm was negotiating with its US suitor after it upped its takeover proposal to £30 billion earlier this week.
Another big riser in the top flight was Imperial Tobacco after the maker of Lambert & Butler and JPS cigarettes said it was looking to boost its presence in the United States by buying assets from two of the country's biggest players, Reynolds and Lorillard.
The Bristol-based company is in talks with the two firms about buying some brands that they may wish to sell in order to secure regulatory clearance for their merger deal.
The stock jumped three per cent or 81p to 2740p. Other top flight risers included Friends Life, which announced it is to sell Luxembourg-based wealth manager Lombard to funds managed by investment firm Blackstone in a deal worth up to £356 million.
Friends, which gained the business through the purchase of Friends Provident in 2009, plans to use £261 million of the proceeds for a share buy-back. The stock was 5.4p higher at 325.6p.
The biggest risers on the FTSE 100 Index were firms Shire up 270p to 4870p, Imperial Tobacco up 81p to 2740p, Coca-Cola HBC up 39p to 1351p and ITV up 4.1p to 177.8p.
The biggest fallers on the FTSE 100 Index were Randgold Resources down 115p to 5120p, Fresnillo down 17p to 928p, Intertek down 40p to 2659p and Johnson Matthey down 37p to 2972p.