FTSE 100 closed up over 30 points at 7,146, but off the session high of 7,197, as US shares turned weaker and Brexit fears rumble on.
The UK premier index added 0.43% on the day, while FTSE 250 added over 123 points at 19,690.
In the currency markets, the pound shed 0.29% against the Euro and added 0.30% against the US dollar.
"The gains on the FTSE are part of a broader rally across Europe, as well as being down to big moves from individual stocks, such as Smurfit Kappa after it rejected a takeover bid and Intertek following solid numbers; as well as Tesco and Morrisons after a report showed that these two supermarket chains were the fastest growing over the past 12 weeks," said Fiona Cincotta, a market analyst at City Index.
On Wall Street at the time of writing, the S&P 500 added 1.05%, or over 28 points, to 2,719, while the Dow Jones was down 117 points at 24,755.
Smurfit Kappa Group PLC (LON:SKG) took the Footsie first prize as top riser, adding 19.67% to 3,042p after the Ireland-based firm revealed that it has rejected an "unsolicited and highly opportunistic" takeover offer from International Paper Co (NYSE:IP).
Top laggard was Just Eat (LON:JE.), which tanked 12.56% to 744.80p, as the market appeared to decide that a solid set of results on the face of it were weaker-than-expected forecast and the group's higher-than-anticipated investment plans also worried.
The Footsie remained firmer but slipped back from highs in late afternoon trading as US stocks saw opening strong gains eroded as concerns over a possible trade war and the path for US interest rates remain a drag, offsetting some positive news from Korea.
Around 2.50pm, the FTSE 100 index was 53 points firmer at 7,169, staying below the day's peak of 7,197.80.
On Wall Street, after half an hour of trading, the Dow Jones was up 30 points at 24,894, but that was around two-thirds of an opening triple-digit advance as investors took some profits on Monday's 336 points surge.
US blue chips were boosted on Monday by a push back against President Trump's tariff plan from key Republicans such as House Speaker Paul Ryan, although worries over a possible trade war continued to be an underlying concern.
Chris Beauchamp, chief market analyst at IG commented: "The sight of the major trade blocs reverting to delightfully old-fashioned mercantilist views should worry investors, who have done well out of years of globalisation.
"That the EU finds it necessary to react to President Trump's moves, at a time when it faces the headache of Brexit and real concerns about the unity of its eastern flank, reveals the union's concerns about the potential hit to trade.
He added: "Still, there are signs that Republicans in Washington are mobilising in an attempt to block further US moves, and it is this that is helping steady nerves across stock markets."
Encouraging headlines from talks between North and South Korea, reportedly including plans for the first summit in a decade next month, also provided support.
Administrators for Beaufort Securities have frozen almost ?800mln in the insolvent broker's client assets, and said they don't expect to return any before mid-April.
PwC also said in a statement they had ringfenced a further ?50mln in segregated client money accounts, cut Beaufort staff to 40 from 120 through redundancy and closed two offices.
The Financial Conduct Authority placed Beaufort into insolvency last week amid concerns over its financial health and its alleged role in a US criminal investigation into a more than US$50mln stock fraud and laundering scheme.
The FTSE 100 index maintained its gains in lunchtime trade, just easing back from the session high as investors awaited the restart on Wall Street for fresh direction.
Around 12.40pm, the UK blue chip indee3x was ahead 56 points at 7,172, below the day's peak of 7,197.80.
US stock futures pointed to a continuation of Monday's strong gains on Wall Street, with the Dow Jones leaping over 336 points higher on Monday to close at 24,874 boosted by a push back against President Trump's tariff plan from key Republicans such as House Speaker Paul Ryan.
Craig Erlam, senior market analyst at Oanda commented: "Investors may have been rattled by the prospect of a trade war after Donald Trump's recent tariffs announcement, but equity markets are once again recovering as it becomes clear that the US President does not have the full backing of his party of this one."
He added: "Some Republicans, including House Speaker Paul Ryan, have warned against starting a trade war that could damage the economy and undo the benefits of the recently passed tax reforms, highlighting that Trump is lacking the full support of his party on this particular issue.
"Trump's comments linking the tariffs to NAFTA negotiations also suggested that they could be dropped if a new agreement is signed, suggesting he may simply be using the threat of tariffs to put pressure on others to deliver what he considers to be fair and reciprocal trade."
Traders were also bolstered by encouraging headlines from talks between North and South Korea, reportedly including plans for the first summit in a decade next month.
South, North Korea to hold summit in April: South Korea says https://t.co/aLy5JeH4Cf pic.twitter.com/t6CtRxtxrU
- Reuters Top News (@Reuters) 6 March 2018Paper sector wrapped--up
In London, Smurfit Kappa Group PLC (LON:SKG) was the top FTSE 100 gainer, jumping 23.5% higher to 3,138p after the Ireland-based firm revealed that it has rejected an "unsolicited and highly opportunistic" takeover offer from International Paper Co. (NYSE:IP).
The bid move lit a fire under other paper and packaging firms, with fellow blue-chip group Mindi PLC (MNDI) adding 3.8% at 1.978p helped by an upgrade in rating from Swiss bank Credit Suisse to 'outperform' from 'neutral'.
The stock has not been the most exciting investment, essentially going nowhere over the last year, but during that period Credit Suisse argues that the company's earnings prospects and valuation metrics have materially improved.
Elsewhere, Tesco PLC (LON:TSCO) shares jumped as Barclays reinstated its rating on the stock at 'overweight' following the completion on Monday of the supermarket group's ?4bn merger with Booker.
Tesco's shares were also supported by the latest industry data, which showed the company and WM Morrison Supermarkets PLC (LON:MRW) were the best performers of the UK's big four supermarkets over the last three months.
Morrison's shares rise 1.2% to 228.3p, also supported by positive comments on moment from Jefferies International which upgrade its stance for both it and Tesco to 'buy'.
Just Eat PLC (LON:JE.) results today left investors with a sour taste in their mouths, with the online food delivery firm's shares topping the FTSE 100 fallers, dropping 10% to 766.2p.
David Madden, market analyst at CMC Markets UK, noted that while Just Eat's figures looked solid on the face of it, they were weaker-than-expected forecast and higher-than-anticipated investment plans also took the shine off the numbers.
The CMC analyst also pointed out: "The earnings outlook was 23% below analysts' estimates, however, and the company plans to spend ?50mln in investment to keep ahead of its rivals. The combination of increased investment and a softer-than-expected outlook sent the share price to its lowest level since October."
But, he said, as the stock has been in a strong upward trend since August 2014, some bargain hunters might enter the fold.
Just Eat's drop failed to impact the FTSE 100 index, which remained up 65 points at 7,181 around 10.20am.
Tesco PLC (LON:TSCO) and Wm Morrison Supermarkets PLC were gainers in early morning trading after the latest industry tillroll data showed the market leader and the number four-placed supermarket chain as the best performers of Britain's 'Big Four' over the last three months.
Market researcher Kantar Worldpanel said Tesco and Morrisons' sales both increased by 2.7% year-on-year over the 12 weeks to February 25, ahead of growth of 2.3% at Asda, owned by Walmart Inc (NYSE:WMT), and 1.1% at J Sainsbury plc (LON:SBRY).
On the FTSE 100 index - which was up 66 points at 7,181 - Tesco shares gained 2.8% at 209.7p, Morrison's - which issues full-year results next week - was up 0.8% at 227.4p, while Sainsbury's lost 1.2% at 250p. US broker Jefferies International upgrade both Tesco and Morrison's to 'buy' from 'hold' in a sector review yesterday.
Out now: The latest UK #GroceryMarketShare data covering the 12 weeks to 25 February 2018. Read more: https://t.co/kP0PTaNgxu pic.twitter.com/CbuYMFQMrl
- Kantar Worldpanel (@K_Worldpanel) 6 March 2018The Big Four's growth, however, continued to be outpaced by German discounters Aldi and Lidl, whose sales were up 13.9% and 13.3% respectively. Grocery inflation was 2.9% during the period, down from 3.6% in Kantar's February report.
Meanwhile, a survey released overnight from the British Retail Consortium (BRC) said shoppers spent more on food in the three months to February and once again cut back on non-essential purchases as the rise in inflation after the Brexit vote of 2016 squeezed their spending power.
The amount of money spent with retailers in February rose by 1.6% compared with a year earlier, slightly above the pace of growth seen in the previous three months, the BRC said.
Non-food sales in the three months to February were 0.5% lower than a year earlier, while food sales grew 4.0%.
Samuel Tombs chief UK economist at Pantheon Macroeconomics: "Growth in retail sales continued to match last year's average rate in February, indicating that consumers' spending is not about to step up and make a bigger contribution to GDP growth."
He added: "Note, however, that the BRC's survey covered the four weeks between January 28 and February 24, before the three days of heavy snow last week which likely depressed retail sales at the very end of February and start of March.
"The hit to the official measure of sales will probably be around one-quarter of the 2.0% month-to-month decline recorded in December 2010, when Britain was hit by two weeks of heavy snow."
The Footsie jumped higher in early trading, extending yesterday's gains after a strong performance overnight from US and Asian markets, helped too by a bid move in the paper and packaging sector.
Around 8.30am, the FTSE 100 index was up 63 points at 7,179, having gained 46 points on Monday.
Connor Campbell, financial analyst at Spreadex commented: "After the Dow Jones received an unlikely source of anti-tariff sentiment on Monday night, the European indices were in rebound mode this Tuesday."
He added: "The Dow shot up by 1.4% last night, as House Speaker Paul Ryan's spokesperson stated that members of the GOP are "extremely worried about the consequences of a trade war" and are "urging the White House to not advance'" with the plans (loosely) outlined by Trump last week.
"While this signals yet more destabilising discord for the President, investors' primary focus was on the tariff-blocking obstacles created by Ryan and co., and their relief was immediate to see."
Reporter: "Paul Ryan says he's worried about a trade war, are you going to back down on the tariffs?
President Trump: "No, we're not backing down." pic.twitter.com/EUk8JUJVyU
In London, Smurfit Kappa Group PLC (LON:SKG) was the FTSE 100 and the market's top gainer, leaping 19% higher to 3,026 after the Ireland-based firm revealed that it has rejected an "unsolicited and highly opportunistic" takeover offer from International Paper Co. (NYSE:IP)
The Dublin-headquartered paper and packaging group said it believes the offer - comprising cash and a minority holding in an enlarged business - does not reflect its worth nor its prospects going forward and would involve its shareholders receive "a high proportion" of their consideration in International Paper shares.
LoopUp Group PLC (LON:LOOP) said 2018 has started in encouraging fashion with some major recent customer wins set to roll out.
Sirius Minerals PLC (LON:SXX) expects to build on a year of "meaningful progress" with plans to significantly advance its fertiliser mine development through 2018. The operational and boardroom efforts are expected to culminate in the completion of the project's Stage 2 financing later this year, which once reached, would be the stand-out achievement of the year.
Flying Brands Ltd (LON:FBDU) said its subsidiary, StoneChecker Software, has signed an exclusive marketing and distributor arrangement with Korea Computer Motion ISG that will see its kidney stone analysis software distributed in South Korea.
Tissue Regenix Group PLC (LON:TRX) announced that its subsidiary, CellRight Technologies has signed a long-term, multi-year distribution agreement with Arthrex Inc., a premier orthopaedic surgical solutions company.
Silence Therapeutics PLC (LON:SLN) remains confident a first human clinical trial will start by the end of the year.
Amryt Pharma PLC (LON:AMYT) has signed its fifth new distribution deal in approximately three months for Lojuxta, which is used to treat a rare life-threatening disease.
Shares in OptiBiotix Health plc (LON:OPTI) surged early doors after the human microbiome specialist announced a production and commercialisation agreement with Fine Foods & Pharmaceuticals.
Strategic Minerals Plc (LON:SML) has completed its acquisition of the Leigh Creek copper mine in South Australia, following the payment of A$1.5mln to the vendor, Resilience Mining. The project benefits from a 2016 feasibility study, and Strategic Minerals is regarding it as likely to provide near-term cash flow.
Kennedy Ventures PLC (LON:KENV) has confirmed its name will change soon to Kazera Global PLC, while its investment emphasis remains mining in Africa.
HemoGenyx Pharmaceuticals PLC (LON:HEMO), the biotechnology company developing novel therapies to transform bone marrow, or blood stem cell, transplantation for the treatment of blood diseases, announced that H. Michael Shepard has been appointed to the company's Scientific Advisory board. The group said Dr. Shepard is a pioneer in modern cancer research, his work has leading to the discovery and development of many successful cancer treatments including Herceptin/trastuzumab, an antibody used to treat breast cancer patients.
The FTSE 100 is expected to open on the front foot on Tuesday thanks to a quite sudden increase in investor appetite.
In London, CFD and spreadbetting firm IG Markets sees the FTSE 100 making a positive but measured start to the session - it sees the blue chip benchmark up 40 point, calling it at 7,161 to 7,163.
Wall Street benchmarks started the week strongly, breaking the recent losing streak. The Dow Jones rose 336 points or 1.37% to close at 24,874. Similarly, the S&P 500 gained 1.1% to 2,720 while the Nasdaq added 1% to change hands at 7,330.
Jasper Lawler, analyst at London Capital Group, highlight a number of reasons for the improving mood in the US market though he said the precise trigger was harder to pinpoint.
"Fears over a trade war eased in the overnight session, possibly thanks to relatively little interest by China in retaliating against the US, at least for the time being," Lawler said in a note.
"Or possibly because the US Republican's may try to block Trump's trade tariffs, for fear of what implementing them could do to the US economy.
"A third reason that market concerns dropped down a gear, could be thanks to President Trump showing potential for flexibility surrounding the steel and aluminium tariffs by linking them to NAFTA agreement negotiations."
The positivity carried over into Asia, where Japan's Nikkei advanced 1.79% to 21,417. Hong Kong's Hang Seng rose further, gaining 2.2% to trade at 30,546 whereas the Shanghai Composite climbed 0.86% to 3,284.
Trading updates: Ashtead Group PLC (Q3) (LON:AHT), McCarthy & Stone PLC (LON:MCS)
Finals: Just Eat PLC (LON:JE.), Intertek Group PLC (LON:ITRK), Aggreko PLC (LON:AGGK), Bodycote PLC (LON:BOY), Cairn Homes PLC (LON:CRN), Escher Group Holdings PLC (LON:ESCH), Headland Group PLC (LON:HEAD), Huntsworth PLC (LON:HWG), Harworth Group PLC (LON:HEG), Ibstock Plc (LON:IBST), IWG PLC (LON:IWG), LoopUp Group PLC (LON:LOOP), LSL Property Services PLC (LON:LSL), MPAC Group PLC (LON:MPAC), Rotork PLC (LON:ROR), SDL Plc (LON:SDL), Silence Therapeutics PLC (LON:SLN), Yu Group PLC (LON:YU)
Interims: CAP-XX Limited (LON:CAPX), Craneware PLC (LON:CRW), Purecircle Limited (LON:PURE)
Economic data: US factory orders