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News of mergers and an increase in the values of commodity shares pushed the FTSE 100 up to an 11-month high of 4,966.32 points during morning stock market trading.
The index later retreated slightly to 4,961.18 points at midday - a rise of 0.57 per cent on yesterday's close.
An increase in the price of gold, which broke above $1,000 (£606) per ounce today, helped boost commodity companies, with Anglo American adding 3.29 per cent to its share price and Rio Tinto jumping by 3.69 per cent.
In Paris, the CAC 40 added 0.28 per cent to take it to 3,662.91 points, while Frankfurt's DAX 30 was 0.44 per cent higher at 5,487.50 points during early afternoon trading.
News that Deutsche Telekom and France Telecom are to merge T-Mobile and Orange in the UK also helped to boost markets.
Yesterday, the announcement from Cadbury that it has rejected a £10.2 billion takeover from Kraft Foods helped the FTSE 100 to rise.
