Britain's top share index was up 2.8 percent at midday Friday, staging a comeback after seven straight sessions of declines as banks rallied after fresh U.S. stimulus packages gave global markets some badly needed relief.
At 1217 GMT the FTSE 100 index .FTSE was 113.96 points higher at 4,235.07, not far from session highs.
The UK blue chip index closed 59.53 points, or 1.4 percent, lower Thursday with the post-Christmas rally a distant memory.
"It's something of a bear market rally at the moment," said Richard Hunter, head of equities at Hargreaves Lansdown.
U.S. stock index futures were higher on Friday after news Bank of America (BAC.N) will receive a $20 billion government capital injection and the Senate voted to approve the release of the second half of the banks bailout fund.
UK banks bounced back after a dismal week lifted by the better news in the sector, with Royal Bank of Scotland (RBS.L), Barclays (BARC.L), Standard Chartered (STAN.L), Lloyds TSB (LLOY.L), and HSBC (HSBA.L) up between 0.5 and 8.0 percent.
The UK government's ban on short selling of 34 major financial stocks expired at midnight.
Across the Atlantic, as expected, Citigroup (C.N) and Bank of America reported big fourth quarter losses on Friday.
Ireland's government nationalised Anglo Irish Bank late on Thursday in a step to prevent a possible collapse that could have undermined the sector and crippled the country's finances.
Bank of England Deputy Governor John Gieves said this year will be very difficult for the global economy, and the authorities in Britain and overseas needed to consider further monetary and fiscal action.
Mining issues contributed strongly to gains for the blue chips with Rio Tinto (RIO.L), Xstrata (XTA.L), Anglo American (AAL.L), BHP Billiton (BLT.L), Antofagasta (ANTO.L) and Kazakhymys (KAZ.L) up between 3.5 and 9.8 percent as demand concerns eased.
