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On Sunday night, rebel troops entered Tripoli and took control of the capital, arresting three of Gaddafi's sons in the process.
The FTSE 100 rose to above 5,100 - after falling to below 5,000 before the weekend - while the CAC 40 topped the 3,060 mark.
Commenting on the change, David Buik, partner at BGC Partners, told Euromoney: "[The] sharp rally from what was originally estimated to be a negative opening was given added momentum from the hope of a settlement in Libya."
However, he warned that the improvement may not last for long, describing it as a "limp rally" and saying that the key to economic recovery is the banks.
He noted that many of the financial institutions have lost between 40 and 50 per cent of their value since February this year.
Posted by Greg Secker
