The FTSE 100 rebounded from Tuesday's heavy losses as European traders settled and shook off concerns over potential inflation rises.
Sentiment in the capital lifted as the latest set of GDP figures revealed a rebound in the economy in March with a better-than-expected 2.1% rise for the month.
London's top flight closed 56.64 points higher, or 0.82%, at 7,004.63 on Wednesday.
Michael Hewson, chief market analyst at CMC Markets UK, said: "After getting body slammed on Tuesday, European markets have enjoyed a fairly decent rebound today, with the FTSE 100 leading the way higher, moving back above 7,000, although we still have some way to go to reverse Tuesday's losses.
"Today's resilience is all the more surprising given that this afternoons US Consumer Price Inflation (CPI) data came out much hotter than expected, at 4.2%, sending 10-year yields higher across the board."
The London index was buoyed by strong performances by BP and Royal Dutch Shell, as the price of oil headed back towards 70 dollars a barrel due to rising demand expectations.
The price of Brent crude increased by 1.14% to 69.33 dollars per barrel.
Europe's other major markets saw more modest rises as they lost some steam during the session as US caution dragged on trading.
The German Dax increased by 0.2% and the French Cac moved 0.19% higher.
In the US, the Dow Jones slipped as traders continued to sell off tech stocks amid fears that rising inflation could lead to tighter fiscal policy which would particularly impact the sector.
Meanwhile, sterling was muted after a robust set of GDP figures but lost ground against a stronger US dollar.
The pound decreased by 0.16% versus the US dollar to 1.407 and was down 0.09% against the euro at 1.166.
In company news, betting giant Flutter finished in the red after it said that plans to float its US business FanDuel could be delayed after the boss of the sports betting arm decided to step down. FanDuel chief executive Matt King is set to leave business, which will impact plans to spin a stake from the business on the US stock market. Flutter shares fell by 595p to 12,760p.
Just Eat Takeaway was the FTSE 100's biggest faller after rival Delivery Hero announced plans to re-enter the German market. Takeaway bought Delivery Hero's German arm in 2018 before merging with Just Eat, but the move to now compete in the country sent shares down 567p to 6,247p.
Diageo closed higher after it restarted its plan to return up to £4.5 billion of cash to investors as it saw trading rebound from the impact of the pandemic. It closed 108.5p higher at 3,298.5p.
The biggest risers on the FTSE 100 were BP, up 10.7p at 315.3p, Diageo, up 108.5p at 3,298.5p, Royal Dutch Shell A, up 45.4p at 1,413p, and Royal Dutch Shell B, up 40p at 1,353.8p.The biggest fallers of the day were Just Eat Takeaway, down 567p at 6,247p, Flutter, down 595p at 12,760p, Renishaw, down 195p at 5,430p, and Aveva, down 58p at 3,107p.
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