Markets managed to shrug off the UK ratings downgrade and some disappointing economic data from China on Monday morning, as stocks advanced on the back of optimism surrounding central-bank stimulus.
"Signs from the US and Japan indicate they will continue with their monetary policy for some time yet," said financial sales trader Lee Mumford from Spreadex.
Over the last few days, Federal Reserve Chairman Ben Bernanke showed his commitment to the bank's third round of quantitative easing, brushing off fears that it would create economically-risky asset bubbles. The head of the St Louis Fed also said that the Fed is "going to stay easy for a long time".
Meanwhile, hopes that the Bank of Japan will appoint a new chief who favours stimulus were also helping sentiment this morning.
Nevertheless, Mumford said that gains on stock markets "could be limited as investors continue to keep a close eye on the second day of the Italian elections". Initial estimates of the results are due at 15:00 in Rome.
In other news, ratings agency Moody's stripped the UK of its 'AAA' rating on Friday and said the growth outlook in the medium term will remain weak. The economy, which hasn't suffered a downgrade in over 30 years, is now rated at 'AA1'. Standard and Poor and Fitch both continue to rate the UK as 'AAA'.
Markets were also digesting the HSBC 'flash' manufacturing purchasing managers' index in China which fell from a two-year high of 52.3 to 50.3 in February, missing the 52.2 consensus estimate.
The leader of Cyprus's conservatives Nicos Anastasiades was elected as the seventh president of Cyprus after winning 57.5% of the votes in a second round run-off over the weekend. Anastasiades won by the widest margin in 30 years over.
FTSE 100: Banks gain; Reckitt drops
Banking stocks were among the best performers this morning with RBS making gains ahead of tis full-year results on Thursday. According to The Independent this morning, the bank could announce plans to float its American retail unit Citizens.
Sector peers Barclays, HSBC and Standard Chartered were also in demand early on.
Heading the other way was consumer products giant Reckitt Benckiser which tanked after the US FDA gave the green light for two unnamed drug manufacturers to produce a generic version of its SUBOXONE tablets.
Education and publishing firm Pearson was also lower after the company announced a £150m restructuring programme and gave a gloomy outlook for the industry.
Distribution and outsourcing group Bunzl was higher after saying that full-year revenues rose 5.0% last year, helped by its "significant" acquisition spend.
Power systems group Rolls-Royce rose after being awarded a $40m contract to supply equipment and related services to power the flow of natural gas through the Uzbekistan section of the Turkmenistan-China natural gas pipeline.
FTSE 100 - Risers
Antofagasta (ANTO) 1,116.00p +2.95%
Royal Bank of Scotland Group (RBS) 353.90p +2.58%
Anglo American (AAL) 1,990.50p +2.50%
Barclays (BARC) 313.90p +2.25%
Bunzl (BNZL) 1,245.00p +1.97%
BHP Billiton (BLT) 2,135.00p +1.96%
Eurasian Natural Resources Corp. (ENRC) 371.70p +1.92%
Schroders (SDR) 2,053.00p +1.84%
BP (BP.) 452.10p +1.81%
ARM Holdings (ARM) 940.50p +1.79%
FTSE 100 - Fallers
Reckitt Benckiser Group (RB.) 4,340.00p -3.90%
Pearson (PSON) 1,179.00p -3.04%
Reed Elsevier (REL) 695.00p -1.35%
Associated British Foods (ABF) 1,816.00p -0.77%
British Land Co (BLND) 575.00p -0.69%
Marks & Spencer Group (MKS) 375.10p -0.66%
Next (NXT) 4,222.00p -0.57%
Intertek Group (ITRK) 3,382.00p -0.41%
SABMiller (SAB) 3,231.00p -0.22%
Whitbread (WTB) 2,628.00p -0.15%
FTSE 250 - Risers
Senior (SNR) 238.00p +7.55%
Ferrexpo (FXPO) 249.10p +3.19%
New World Resources A Shares (NWR) 269.70p +3.14%
Dialight (DIA) 1,201.00p +3.09%
Hiscox Ltd. (HSX) 512.00p +2.71%
Alent (ALNT) 389.50p +2.50%
IP Group (IPO) 130.00p +2.36%
Bumi (BUMI) 368.10p +2.22%
Redrow (RDW) 195.50p +2.04%
FirstGroup (FGP) 189.80p +2.04%
FTSE 250 - Fallers
Hansteen Holdings (HSTN) 81.00p -2.94%
Bank of Georgia Holdings (BGEO) 1,334.00p -2.56%
JD Sports Fashion (JD.) 782.50p -2.19%
Savills (SVS) 517.50p -1.43%
Menzies(John) (MNZS) 715.00p -1.17%
Rank Group (RNK) 162.50p -1.10%
Domino's Pizza Group (DOM) 532.00p -1.02%
Genus (GNS) 1,443.00p -0.89%
Big Yellow Group (BYG) 370.40p -0.86%
Utilico Emerging Markets Ltd (DI) (UEM) 187.70p -0.69%