European markets lifted after Greece finally struck a deal with its creditors that should bring it back from the brink of financial collapse and exit from the euro.
But reaction on the London market was muted as stocks had already rallied in anticipation of a deal at the end of last week, and the terms still need approval from the Greek parliament this week.
The FTSE 100 Index closed 64.6 points higher at 6738, after all-night talks in Brussels led to an agreement.
Germany's Dax was up by 1.5% and France's Cac 40 by 2%.
The FTSE 100 had already climbed more than 90 points last Friday after reform proposals tabled by debt-laden Greece were seen as increasing the chances of a deal.
It had been teetering on the brink with no sign of agreement and a referendum just over a week ago rejecting concessions seen as necessary to unlock a new bail-out.
Greece last week requested a three-year 53.5 billion euro (£38.1 billion) financial package but as talks dragged on the estimate of the sum needed for the country to remain solvent has risen to around 85 billion euros (£60.5 billion).
Experts were sceptical about today's deal saying more talks were still needed.
ING Bank's Carsten Brzeski said: "The champagne bottles should still remain in the fridge for a while. Eurozone politicians should rather be prepared for additional long meetings and negotiations. This morning's agreement is a typical European fudge."
The euro fell back after early gains, with sterling surging by two cents against the single currency to just under 1.41, as high-risk investors retreated and took profits. The pound was flat against the US dollar, at 1.55.
In stocks, banks were among those doing well after the deal was announced, with Barclays up 2%, or 5.7p, to 273.7p.
HSBC, Europe's largest lender, rose almost 2%, or 9.5p, to 575.2p. Royal Bank of Scotland climbed 6.5p to 351.6p while Lloyds added 1p to 85.3p.
B&Q and Screwfix owner Kingfisher, which also owns French brands Castorama and Brico Depot, added 10.6p to 363p.
Vodafone, which last year bought a controlling stake in Greek broadband and fixed line provider Hellas Online for 72.7 million euro (£51.8 million), rose 0.9p to 236.6p.
Electrical to mobiles giant Dixons Carphone, which also has a large presence on the country, climbed 7.9p to 457.4p.
On a quiet day for corporate news, International Airlines Group was the top riser on the top-flight leaderboard after Ryanair agreed last week to sell its stake in Aer Lingus to the British Airways owner. IAG shares rose 18p to 549p p.
The biggest risers of the FTSE 100 Index were International Airlines Group up 18p at 549p, Morrisons up 5.2p at 178p, Kingfisher up 10.6p at 363p and Admiral Group up 39p at 1472p.
The biggest fallers of the FTSE 100 Index were BG Group down 9.5p at 1071p, Coca-Cola HBC down 8p at 1345p, National Grid down 4.1p at 851.1p and Royal Dutch Shell down 8.5p at 1840p.
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