The top-share index pulled out of a mid-afternoon slump to advance 40 points, with banks doing most of the heavy lifting.
The FTSE 100 finished at 6,396, with Barclays (LON:BARC), up 4.6%, the top riser in the wake of the Bank of England's stress test results.
The Bank of England said five of seven British banks had passed its latest stress tests, and even one of the pair that failed – Royal Bank of Scotland (LON:RBS) – ended the day 3.2% higher at 312.2p, though the other failure, Standard Chartered (LON:STAN) surrendered the morning's gains to end up a halfpenny weaker on the day.
Property groups were also wanted, but supermarket chain Morrisons (LON:MRW) dipped 1.2p to 151.3p on fears it could drop into the FTSE 250 in this week's quarterly FTSE review.
Morrisons is undergoing a shake-up under new chief executive David Potts as it battles to overcome competition from discounters and online rivals.
Among the mid-caps, Petra Diamonds (LON:PDL) shot up 12.6% to 72.25p, as the company and partner Ekapa Mining bought De Beers’s oldest working diamond mine for US$7.2mln.
Elsewhere in the mining sector, news that investor Metal Tiger (LON:MTR) had taken a 3.37% stake in Goldstone Resources (LON:GRL) boosted the gold explorer's shares by 44.4% at 1.625p.
African Potash (LON:AFPO) grew 20.6% to 1.9p, as it announced plans to team up with South African investment firm Beryl Holdings to jointly expand and enhance fertiliser operations.
Staying with the African focus, Coal of Africa (LON:CZA) was a bright spot after Chinese firm Hengshun agreed in principle to take a 34% stake in the Makhado coking coal project in South Africa. Shares rose 12.2% to 2.95p.
Cash shell Eco City (LON:PCF) was the day's best performer, increasing in value by two-thirds, as MXC Capital signalled its intention to take a 24.7% stake in the company for £1.3mln as part of a £5mln fund-raising.
MID-SESSION WRAP
Banks led the London market higher on Tuesday, but Morrisons fell on fears it could drop out of the top flight.
Barclays was the sector's highest riser with an 8.35p gain to 231.55p after the Bank of England said five of seven British banks had passed its latest stress tests.
HSBC (LON:HSBA) was 8.5p up at 538p and Lloyds Banking Group (LON:LLOY) lifted 1.8p to 74.76p.
Royal Bank of Scotland (LON:RBS) and Standard Chartered (LON:STAN) increased 9.5p to 311.9p and 3.8p to 561p respectively, despite failing to meet all the test targets.
But supermarket chain Morrisons (LON:MRW) dipped 1.3p to 151.2p as it emerged that it could drop into the FTSE 250 in this week's quarterly FTSE review.
Morrisons is undergoing a shake-up under new chief executive David Potts as it battles to overcome competition from discounters and online rivals.
Other drop candidates included security group G4S (LON:GFS), down 2.4p at 229.3p, and aircraft undercarriage maker Meggitt (LON:MGGT), which descended 0.6p to 387.1p.
The potential promotion winners consisted of payment group Worldpay (LON:WPG), falling 0.75p to 298.25p, credit provider Provident Financial (LON:PFG), up 26p at 3598p and Irish investment firm DCC, ahead 30p at 6000p.
The FTSE 100 Index increased 32.8 points to 6388.89 at lunchtime, also buoyed by talk of a takeover bid for Home Retail's DIY chain Homebase.
Home Retail (LON:HOME) shares advanced 5p to 107.9p after a report claimed former Garden Centre Group boss Nicholas Marshall was planning a private equity-backed approach.
Markets in France and Germany were down despite a eurozone purchasing managers index (PMI) survey showing that manufacturing in the single currency area improved for the second month in a row in November.
A similar survey for the UK contained less upbeat news, showing the manufacturing PMI fell to 52.7 in November from 55.2, below the consensus of 53.6.
Samuel Tombs at Pantheon Macroeconomics said: "With the strong pound making exports uncompetitive and domestic consumer demand likely to grow less robustly next year as real income growth slows, the manufacturing sector is unlikely to see sustained growth in the near-term."
Back in the markets, Topps Tiles (LON:TPT) rose 0.5p to 163.25p after reporting higher annual profits and a good start to this financial year.
Theme park operator Merlin Entertainments (LON:MERL) advanced 5.1p to 414.3p after saying a Halloween upturn at Alton Towers had helped to keep it on track to hit annual targets.
Condor Gold (LON:CNR) gleamed 2p to 31.5p on news that it had applied for an environmental permit for an open pit mine and associated infrastructure at its La India project in Nicaragua.
Petra Diamonds (LON:PDL) brightened 7.8p to 71.95p as the company and partner Ekapa Mining bought De Beers’ oldest working diamond mine for US$7.2mln.
News that investor Metal Tiger (LON:MTR) had taken a 3.37% stake in Goldstone Resources (LON:GRL) boosted the gold explorer's shares by 0.5p to 1.62p. Metal Tiger's stock backtracked 0.05p to 0.88p.
LONDON OPEN
British banks boosted blue-chip shares in London after most of them passed stress tests, with two notable exceptions.
Shares in all the listed banks that passed the Bank of England (BoE) tests rose, including HSBC (LON:HSBA) up 6.4p to 535.9p, Barclays (LON:BARC) rising 6.2p to 229.4p and Lloyds Banking Group (LON:LLOY) gaining 1.9p to 74.86p.
Royal Bank of Scotland (LON:RBS) and Standard Chartered (LON:STAN) were also up, increasing 9.1p to 311.5p and 10.4p to 567.6p respectively, despite failing to meet all the test targets.
RBS is still majority-owned by the British state following a taxpayer bailout following the 2008 financial crash and Standard's new chief executive is bidding to revive the group following problems.
Both RBS and Standard said they had taken steps to bolster their balance sheets, allowing them to avoid any corrective action by the BoE.
The rises lifted the FTSE 100 Index by 30 points to 6,386 in early London trading.
Markets in France and Germany were down despite a Eurozone purchasing managers index (PMI) survey showing that manufacturing in the single currency area improved for the second month in a row in November.
A similar survey for the UK contained less upbeat news, showing the manufacturing PMI fell to 52.7 in November from 55.2, below the consensus of 53.6.
Back in the markets, Topps Tiles (LON:TPT) rose slightly by 0.25p to 163p after reporting higher annual profits and a good start to this financial year.
Theme park operator Merlin Entertainments (LON:MERL) advanced 4.6p to 413.8p after saying a Halloween upturn at Alton Towers had helped to keep it on track to hit annual targets.
Condor Gold (LON:CNR) gleamed 2p to 31.5p on news that it had applied for an environmental permit for an open pit mine and associated infrastructure at its La India project in Nicaragua.