Receding fears about a potential US military strike on Syria and decent data from China lifted UK stocks on Thursday morning, with the FTSE 100 rising to levels not seen in nearly a month.
London's benchmark index was up 0.8% at 6,581.91 by midday; the last time it closed higher was on August 14th when it ended the day at 6,587.43.
Russian Foreign Minister Sergei Lavrov yesterday urged Syria to place any chemical weapons they may have under international control in an attempt to avoid action from the States.
The news that Syrian counterpart Walid Muallem apparently welcomed the proposal eased concerns over a possible Western intervention this morning, especially given that President Barack Obama said that he would put air strikes on hold if Bashar al-Assad's government follows the initiative.
"Stocks rallied on the back of this, as investors don't want another war on their hands, and this recommendation from the Russians could sidestep military intervention while saving face," said Market Analyst David Madden from IG.
Supporting stocks further was a continuing improvement in economic data from China with the third-quarter outlook for the Asian powerhouse continuing to brighten. Industrial output, fixed-asset investment and retail sales strengthened during the month of August, with all three economic indicators rising by more than expected.
Market Strategist Ishaq Siddiqi from ETX Capital said that this morning's data "indicat[es] the world's second-largest economy is finally back above its knees after a turbulent first half of 2013."
"China's policymakers are attempting to transform the country's economy into one based on consumption over the current model based on spending and the macro indicators are suggesting that these measures are starting to bear fruit," he said.
FTSE 100: Airlines IAG and easyJet flying high
Airline groups IAG and easyJet were flying higher this morning as crude continued to pull back from its recent highs as fears over turmoil in the Middle East ease. Elevated oil prices
have pressured both stocks over the last few weeks on concerns over the knock-on effects to jet fuel costs.
Shares in easyJet were also helped by comments from Chief Executive Carolyn McCall who said in an interview that the company will be "Europe's preferred airline in five years' time" due to its low-cost operating model.
Financials were also performing well today with RBS, Standard Chartered, Aviva, Aberdeen Asset Management and Schroders among the highest risers.
Leading the downside was pharma giant GlaxoSmithKline which fell sharply after US regulators set out requirements for generic versions of its lung drug Advair, sparking competition concerns over when patents run out in a few years' time.
Costa and Premier Inn owner Whitbread was also down after seeing sales growth slow from 13.8% in the first quarter to just 10.8% in the second as the hot summer weather hit demand at its coffee shops.
Miners were putting in a mixed performance as increased risk appetite was offset by falling metals prices across the board. Glencore Xstrata was in demand after lifting its synergy target - following its merger - to at least $2bn next year as the miner vowed to cut costs and improve operational efficiency. Precious metals groups Fresnillo and Randgold, however, were out of favour.
Rolls-Royce gained after scoring a $175m contract with Asia Gas Pipeline (AGP) for services on a natural gas pipeline in Kazakhstan.
Broker comments were also moving a number of blue-chip stocks this morning: Drinks giant SABMiller was on the climb this morning after HSBC upgraded the stock to 'overweight'; consumer products group Unilever was lifted by Deutsche Bank to 'buy'; and Babcock was higher after JPMorgan labelled the engineering support services company as its top pick in the sector.
FTSE 250: Ashmore jumps, Oxford Instruments slumps
Record subscriptions helped emerging markets asset manager Ashmore to drive strong net inflows into its funds in the year to June, giving the share price a boost this morning. Strong net inflows of $13.4bn led to a 22% increase in assets under management (AuM) to $77.4bn during the year, with average AuM rising 13%.
Oxford Instruments was a heavy faller after saying that while growth in the order intake rate in Industrial Products and third party Service is encouraging, slowness in R&D markets in the Western economies means that the year is likely to be more second half-weighted.
FTSE 100 - Risers
easyJet (EZJ) 1,335.00p +5.37%
International Consolidated Airlines Group SA (CDI) (IAG) 319.50p +4.58%
Standard Chartered (STAN) 1,502.00p +3.19%
Royal Bank of Scotland Group (RBS) 350.80p +3.18%
Aviva (AV.) 412.10p +3.08%
Aberdeen Asset Management (ADN) 380.40p +3.03%
British Land Co (BLND) 574.00p +2.96%
Glencore Xstrata (GLEN) 330.10p +2.74%
Schroders (SDR) 2,486.00p +2.64%
Marks & Spencer Group (MKS) 513.00p +2.50%
FTSE 100 - Fallers
GlaxoSmithKline (GSK) 1,590.00p -3.05%
Whitbread (WTB) 3,129.00p -2.71%
Fresnillo (FRES) 1,249.00p -1.58%
Eurasian Natural Resources Corp. (ENRC) 222.60p -0.98%
Randgold Resources Ltd. (RRS) 4,869.00p -0.92%
Vodafone Group (VOD) 209.00p -0.67%
BG Group (BG.) 1,213.00p -0.33%
Bunzl (BNZL) 1,353.00p -0.29%
BP (BP.) 443.00p -0.25%
Vedanta Resources (VED) 1,189.00p -0.08%
FTSE 250 - Risers
Ocado Group (OCDO) 374.20p +6.91%
Ashmore Group (ASHM) 387.60p +6.81%
Fenner (FENR) 390.40p +5.26%
Thomas Cook Group (TCG) 157.50p +5.07%
Inchcape (INCH) 641.00p +4.74%
Ferrexpo (FXPO) 186.60p +4.42%
Laird (LRD) 233.30p +4.34%
Galliford Try (GFRD) 1,066.00p +4.20%
Berendsen (BRSN) 940.50p +3.75%
Betfair Group (BET) 1,050.00p +3.55%
FTSE 250 - Fallers
Oxford Instruments (OXIG) 1,423.00p -5.76%
African Barrick Gold (ABG) 175.00p -4.68%
Rank Group (RNK) 155.00p -2.58%
PayPoint (PAY) 1,086.00p -1.63%
Moneysupermarket.com Group (MONY) 170.00p -1.33%
BH Macro Ltd. EUR Shares (BHME) € 20.78 -1.28%
Telecom Plus (TEP) 1,337.00p -1.26%
Telecity Group (TCY) 836.50p -1.18%
BH Macro Ltd. GBP
Shares (BHMG) 2,140.00p -1.02%
BH Global Ltd. GBP Shares (BHGG) 1,181.00p -1.01%