The FTSE 100 rose in the morning, advancing 0.4% by early afternoon.
Investors were inspired by US President Barack Obama’s decision to extend tax breaks introduced by his predecessor George W Bush.
According to chief executive of Bank of America (NYSE:BAC) Brian Moynihan, the tax cuts will be positive for business confidence and the job market.
“.... that sort of can shift attitudes among business. At the end of the day, that’s probably what is most important, to have the attitude that yes I will hire more, yes I will do more, because I think I’m being supported,” Moynihan told Bloomberg TV.
Financial stocks were the top performers in European stock markets today.
Royal Bank of Scotland (LON:RBS), hedge fund manager Man Group (LON:EMG) and insurer Prudential (LON:PRU) emerged atop the leaderboard with gains of 3.2%.
Government services company Serco Group (LON:SRP) and platinum miner Lonmin (LON:LMI) added 2.8%.
Bank Barclays (LON:BARC) and oil and gas producer BG Group (LON:BG) climbed 2.5%.
Standard Chartered (LON:STAN) was at the bottom of the pile with a 3% loss. The bank said today that it is currently tracking towards a strong performance in 2010.
“Loan impairment is improving and the fundamentals of the Group are in excellent shape. We remain very well positioned across our growth markets in Asia, Africa and the Middle East,” said Standard Chartered.
Medical devices manufacturer Smith & Nephew (LON:SN), which soared 9% yesterday, declined 2.4%.
Clothing retailer Next (LON:NXT), engineering company GKN (LON:GKN) and hospitality group Whitbread (LON:WTB) lost nearly 2%.
Elsewhere in Europe, Spain’s IBEX35 surged 1.05%, France’s CAC 40 index added 0.55% and Germany’s DAX shed 0.1%.
The Dow Jones Industrial Average (DJIA) and the S&P 500 index are expected to open slightly higher today ahead of weekly US jobless claims data from the Labor Department.
The DJIA and S&P 500 tacked on 0.1% and 0.35% yesterday.
It was reported today that employment in Australia increased by 54,600, while the jobless rate fell from 5.4% to 5.2%.
Australia’s S&P/ASX 200 index climbed 0.9% in response to the news.
Asian markets were in buying mode today.
Hong Kong’s Hang Seng advanced 0.35%, South Korea’s KOSPI tacked on 0.35% and Japan’s Nikkei 225 rose 0.5% after the country's GDP growth in the September quarter was revised form an annialised 3.9% to 4.5%.
China’s Shanghai Composite Index went against the tide, slipping 1.3%.