The FTSE 100 closed firmly in the green after rising on the back of reports that US president Donald Trump wants to fast-track the production of a Covid-19 vaccine.
The Trump administration is considering that the US Food and Drug Administration award an “emergency use authorisation” for the vaccine, which was developed by Oxford University and AstraZeneca, according to the Financial Times.
London’s top flight closed 102.84 points lower at 6,104.73 at the end of trading on Monday.
David Madden, market analyst at CMC Markets UK, said: “Equity benchmarks in Europe are set to finish the day firmly in positive territory.
“The optimism is being driven by a report that President Trump is looking to fast-track the approval of a drug that has the potential to be a vaccine for Covid-19.
“Even though there are no guarantees that things will go according to plan in terms of the drug’s success, traders are snapping up stocks nonetheless.”
The FTSE was also buoyed by a jump in BT shares after Sky News reported that the media giant is preparing to defend itself from takeover approaches.
It jumped by 7.2p to 109p after it asked bankers at Goldman Sachs to update its bid defence strategy.
The other major European markets were driven higher by the uptick in sentiment, which saw energy, banking, airline and house building stocks rise.
The German Dax increased by 2.36%, while the French Cac moved 2.33% higher.
Across the Atlantic, the Dow Jones jumped higher to its best price in exactly six months following the vaccine speculation.
Meanwhile, sterling dipped lower as the broad decline in the value of the pound continued.
The pound fell 0.03% versus the US dollar at 1.308 and was down 0.1% against the euro at 1.108.
In company news, Wetherspoon shares slipped after it warned that the coronavirus crisis will drag it to an annual loss after sales plunged following its reopening last month.
The pub chain told investors that like-for-like bar and food sales are down 16.9% for the 44 days to August 16, compared to the same period last year.
Shares in the company closed 30p lower at 944p on Monday.
Guarantor lender Amigo slumped in value again after it warned that its recently re-appointed chief executive could jump ship if founder James Benamor rejoins the business in a management role.
Shares dived by 5.36p to 12.46p after Amigo said Glen Crawford and its board were “equally aligned in their unanimous rejection” of a series of proposals made by Mr Benamor after the markets closed on Friday.
Elsewhere, hostel operator Safestay closed lower after it said it is in talks with its bank to waive covenants on a debt facility which it expects to breach following the pandemic.
It fell by 1p to 12.5p at the close of play.
The price of oil increased after adverse weather in the Gulf of Mexico put pressure on supply.
The price of a barrel of Brent crude oil increased by 1.49% to 45.01 US dollars.
The biggest risers on the FTSE 100 were BT, up 7.2p at 109p, Melrose, up 4.72p at 103.7p, ITV, up 2.58p at 62.72p, and Shell, up 44.6p at 1,160.4p.
The biggest fallers of the day were GVC, down 15p at 771.2p, Flutter Entertainment, down 150p at 12,110p, Fresnillo, down 15p at 1,219p, and Whitbread, down 28p at 2,370p.