The FTSE 100 Index surged nearly 1% or 54.1 points to 5,627.2 today as it built on yesterday’s strong gains.
Defiant comments from ECB president Mario Draghi on Thursday sparked hopes that European leaders will move to lower Spanish and Italian borrowing costs.
Today, Barclays was the biggest blue-chip riser after a rise in half-year profits helped offset some of the damage caused by the Libor rate-rigging scandal.
Despite revealing that four present and past senior staff, including current group finance director Chris Lucas, were subject to a new investigation by UK regulators relating to fees paid under fundraising deals made in 2008, shares surged 9%.
The beleaguered lender had lost more than 20% of its value in the wake of the scandal but the robust performance of its investment banking arm and an improvement in return on equity were met with relief by investors. Shares climbed 13.4p to 167p.
Other banks followed it higher, with Lloyds up 4%, or 1.1p at 30.2p, and Royal Bank of Scotland ahead 6.6p at 214.5p.
In other corporate results, bookmaker William Hill was 20.7p higher at 311.1p after reporting a 13% rise in pre-tax profits to £143.3million.
Carphone Warehouse jumped 6% or 7p to 131p after a 2% fall in like-for-like sales for the three months to the end of June came in better than the 6% or 7% fall predicted by analysts.
The biggest Footsie risers included Weir Group ahead 59p at £16.59 and Evraz ahead 7.8p at 228.5p.
The biggest Footsie fallers were Pearson down 64p at £12.30, Anglo American off 70p at £18.94, United Utilities down 8.5p at 693p, and Capital Shopping Centres off 3.9p at 322p.
Barry Shepherd, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that the day’s risers included BP, up 1.39% at 438.7p, Petrofac added 2.45% to £14.61 and Xcite Energy finished 2.96% higher at 78.25p.
Fallers included Faroe Petroleum which lost 1.01% at 147.75p and drinks manufacturer A.G. Barr which shed 1.32% to close at 423.2p.