The FTSE 100 has bounced back into positive territory after falling below 5,000 in early trades on Monday,
At 10.28am, the blue-chip index currently stands at 5114.73, a rise of almost 1 per cent, with banks leading the bounce back.
Shares have also risen across Europe with the German Dax up 2.9 per cent and the French Cac 40 up 2.5 per cent.
Earlier, Asian markets had fallen, with Japan’s Nikkei index closing down 2.2 per cent, Hong Kong’s Hang Seng falling 1.5 per cent and South Korea’s Kospi dropping 2.6 per cent.
The increase in European markets comes amid plans for a eurozone rescue plan from the International Monetary Fund. The plan is understood to include a 50 per cent writedown of Greece’s government debt and an increase in the size of the eurozone bailout fund to £1.7tn.