The London markets rebounded from their worst day for three months, despite the Prime Minister confirming a tightening of coronavirus restrictions.
Markets opened strongly in the morning and finished higher, despite a slight retreat, with Boris Johnson providing no surprises for traders in his announcement to Parliament.
The FTSE 100 closed 25.17 points lower at 5,829.46 at the end of trading on Tuesday.
David Madden, market analyst at CMC Markets, said: "The London market gained ground in the wake of the update as the rules weren't as tough as some originally feared.
"The restrictions have more to do with social distancing and health precautions, and the economic impact is unlikely to be as bad as initially thought.
"European stocks took a beating yesterday and it seems the bargain hunters have been out in force today."
Europe's other key markets were also broadly higher as traders digested Monday's massive sell-off, although the French Cac 40 dipped back into the red as sentiment waned later in the day.
The German Dax increased by 0.4%, while the French Cac moved 0.4% lower.
Across the Atlantic, the Dow Jones also opened higher but was less keen to climb than its European counterparts as the impending election and concerns over tech stocks continued to drive reticence among investors.
Meanwhile, sterling dipped again as the dollar extended its recent bullish spell.
The pound fell by 1.46% versus the US dollar at 1.272 and was down 0.35% against the euro at 1.087.
Pubs and hospitality firms were broadly mixed, with Mitchells & Butlers and Marston's shares closing notably higher, while London-focused Young's saw shares dip after the PM advised people to work from home where possible.
In company news, Premier Inn owner Whitbread saw shares slide after it said 6,000 jobs will be cut following a slump in demand due to Covid-19.
It told investors that the cuts would affect 18% of the total workforce across its hotel and restaurant brands, which also includes the Beefeater pubs and Brewers Fayre chains.
Shares in the business closed 60p lower at 2,049p.
Travel giant Tui dipped after it cut its winter capacity due to changing restrictions and reported an unprecedented 83% slump in summer bookings.
It fell 2.3p to 268.7p after it also said winter sales fell 59% against the same period last year.
Irn-Bru manufacturer AG Barr jumped in value after it was buoyed by major cost-cutting over the past six months.
It saw profits dip to £5.1 million for the half-year but ahead of initial forecasts, helping shares to move 57.5p higher to 430p.
Elsewhere, B&Q owner Kingfisher saw shares jump after it reported only a small hit from the Covid-19 pandemic.
Sales were down by 1.3% in the first six months of the year, Kingfisher said, driving a 26.2p rise in shares to 290.9p.
The price of oil rebounded in line with wider sentiment as energy traders bought back after the previous day's selling frenzy.
The price of a barrel of Brent crude oil increased by 0.83% to 41.95 US dollars.
The biggest risers on the FTSE 100 were Kingfisher, up 26.2p at 290.9p, IAG, up 4.8p at 102p, BAT, up 108p at 2,733p, and NatWest, up 3.14p at 96.46p.
The biggest fallers of the day were Hikma, down 116p at 2,470p, RSA, down 18.8p at 452.9p, Whitbread, down 60p at 2,049p, and Admiral, down 75p at 2,700p.
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