THE London markets jumped on the back of a fall in the value of sterling, as cross-party Brexit talks reportedly hit stumbling blocks.
The FTSE 100 closed the day 77.92p higher at 7,241.6p.
Multinational companies on the index were buoyed by the weakness in the pound, while mining stocks rose optimistically amid a quieter day for US-Chinese trade relations.
Michael Hewson, chief market analyst at CMC Markets UK, said: "Having come off the back of big losses yesterday, markets in Europe have rebounded today, helped to some extent by the reduced prospect of an immediate escalation, and a slightly softer tone from President Trump in some of his tweets this morning.
"There appears to be a degree of calculation going on here in that investors appear to be banking on any increased tariffs being in place for only a short period of time, with a deal being concluded soon after, hence today's rebound."
Elsewhere in Europe, the French and German indexes were also buoyed by the potential softening of trade relations.
The German Dax jumped by 0.97% and the French CAC fell by 1.5%.
The value of the pound came under pressure amid reports that cross-party Brexit negotiations between the Conservatives and Labour had hit a deadlock.
The pound fell 0.41% to 1.292 versus the US dollar and 0.19% to 1.153 versus the euro.
In stocks, shares in Vodafone slid after it slashed its shareholder dividend payout for the first time to invest in 5G and cut debts after revealing a mammoth €7.6 billion (£6.6bn) annual loss.
The mobile phone giant announced a 40% cut to its full-year dividend - which is one of the biggest in Britain - to nine cents a share in what marked a stinging blow to investors.
Its share price was 4.9p down at 126.8p.
Elsewhere, surging demand for new vegan sausage rolls helped bakery chain Greggs up its full-year profit outlook thanks to "exceptional" sales growth.
Shares in the group rocketed after the profit cheer, which came as it reported an 11.1% jump in like-for-like sales over the 19 weeks to May 11.
It closed the trading session up 270p at 2,060p.
Premier Foods closed flat despite sliding to a £42.7 million annual loss, after it was hammered by pension charges and restructuring costs.
Shares in the food group stood still at 35.8p, after it reported a 0.6% rise in full-year revenues to £824.3 million.
FTSE 100 shopping centre owner Land Securities Group fell after the declining value of its sites pulled the group further in the red in the year to March.
Shares in the company closed 12.6p down at 879.6p.
Oil prices leapt higher on reports from Saudi Arabia that its infrastructure was being targeted by drone attacks.
The price of a barrel of Brent crude oil rose by 2.15 to $71.5.
The biggest risers on the FTSE 100 were Spirax-Sarco Engineering, up 355p at 8,415p, Evrazz, up 24p at 580.4p, DCC, up 234p at 6,720p and Rio Tinto, up 137p at 4,505p.
The biggest falls on the FTSE 100 were Ocado Group, down 55p at 1,264.5p, Vodafone, down 4.9p at 126.8p, EasyJet, down 16p at 1,000.5p and Land Securities Group, down 12.6p at 879.6p.
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