Leading shares are heading higher in early trading, helped by positive performances from the US and Asia.
Chinese markets are closed this week for holidays, but the Nikkei 225 is up 2.9% as investors shrugged off reports that North Korea had fired a missile over northern Japan for the first time in five years.
Closer to home, markets have welcomed the U-turn on the abolition of the 45p tax rate and also suggestions that chancellor Kwasi Kwarteng will bring forward his spending announcements to this month from 23 November.
Mel Stride MP, chair of the Treasury select committee told Radio 4's Today programme that the decision could mean the Bank of England could raise rates by less than expected next month.
He said: "Provided the OBR forecast and new fiscal targets provide reassurance then bringing these forward should calm markets more quickly and reduce the upward pressure on interest rates to the benefit of millions of people up and down the country.
“In particular getting the forecast out ahead of the MPC meeting on 3rd November might help to reassure our rate setters that they can go with a smaller base rate increase than would otherwise be the case.”
Economists are currently expecting the Bank to lift rates by at least 1%.
So the FTSE 100 has jumped 72.57 points or 1.05% to 6981.33.
Legal & General Group PLC, which fell back last week amid the gilt chaos and worries about pension funds, is up 5% after a positive trading statement.
It said the positive momentum seen in the first half had continued into the second, despite the economic conditions, and the volatiliy in the second half has had limited economic impact on its business.
On last week's turmoil and the Bank of England's intervention to stabilise the market, it said: "Recent extraordinary increases in interest rates, and the unprecedented speed of those increases, have caused challenges for the pension fund clients and counterparties of LGIM's UK LDI (Liability Driven Investment) business.
"The Bank of England announced last Wednesday its intention, in line with its financial stability objectives, to carry out purchases of long dated gilts in a temporary and targeted way to restore orderly market conditions. Interest rates have reduced as a result.
"These steps have helped to alleviate the pressure on our clients. We are continuing to work closely with them to achieve appropriate hedging levels in their portfolios. LGIM acts as an agent between our LDI clients and market counterparties and therefore has no balance sheet exposure."
7.36am: RBA lifts rates
Elsewhere the central bank rate rising season continues.
The Reserve Bank of Australia has lifted interest rates by 25 basis points to 2.6%, its sixth increase in as many months.
It said: "The board is committed to returning inflation [currently around 7%] to the 2% to 3% range over time. Today's increase in interest rates will help achieve that goal and further increases are likely to be required over the period ahead."
But the move was less than markets had been anticipating.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "It is.. encouraging for investors to see that the Reserve Bank of Australia lifted its interest rates by 25bp only, versus 50bp expected by analysts."
7.02am: UK market set to get Wall Street lift
FTSE 100 is expected to open higher on Tuesday following strong gains in the US on Monday.
Spread betting companies are calling the lead index up by around 46 points.
Markets may take some comfort from the news that the chancellor plans to bring forward publication of fiscal forecasts which will show how his plans will be funded.
US markets started the quarter in an upbeat mood with all three major indices posting significant gains lifted by advances in oil and commodity prices.
At the close the Dow Jones Industrial Index was up 765 points at 29,490, the S&P 500 soared 93 points to 3,678 while the Nasdaq Composite advanced 240 points to 10,815.