Sharecast - The FTSE 100 was up 0.2% at 7,485.60.
Richard Hunter, head of markets at Interactive Investor, said: "It remains to be seen whether this relief rally is justified until such time as the planks of banking uncertainty can be removed once and for all, leading to an improvement in investor confidence which is currently in scant supply."
Investors were digesting separate surveys showing that food prices continued to soar in March.
According to the BRC-NielsenIQ Shop Price Index, annual shop price inflation hit a new high of 8.9% in March, from 8.4% in February.
Within that, non-food inflation was 5.9% compared to 5.3% a month earlier, while food inflation surged to 15% from 14.5% in February. It is the highest food inflation rate on record.
Fresh food inflation also hit a new high, rising to 17% from 16.3% a month earlier, while ambient food inflation rose to 12.4% from 12%.
Meanwhile, the latest figures from Kantar showed that grocery inflation rocketed to 17.5% in the four weeks to 19 March, adding more than £800 a year to average household food bills.
Russ Mould, investment director at AJ Bell, said: "Shop price inflation figures showed the ongoing challenges in the UK, with a notable surge in food prices. This is bad news for consumer-facing firms exposed to discretionary spend as the rising cost of the weekly shop will continue to eat into disposable incomes."
Investors were also digesting Bank of England governor Andrew Bailey’s testimony to the UK Treasury Committee.
In equity markets, BA and Iberia owner IAG flew higher after an upgrade to ‘buy’ from ‘neutral’ at Redburn.
BP (LON:BP) gushed higher after it and Abu Dhabi National Oil Co (ADNOC) made a $4bn offer to buy 50% of Israeli offshore natural gas producer NewMed Energy and take it private.
Miners were on the rise, with Glencore (LON:GLEN), Anglo American (LON:AAL) and Rio Tinto (LON:RIO) all up as copper prices advanced.
Softcat surged after saying it expects the outturn for the full year to be "slightly ahead" of previous estimates following outperformance in the first half.
Ocado (LON:OCDO) reversed earlier gains to trade sharply lower, despite saying that Ocado Retail - its 50:50 joint venture with Marks & Spencer - saw a 3.4% jump in first-quarter revenues and that it remained on track to return to sales growth and profitability.
United Utilities fell after it trimmed its full-year revenue outlook, while Synthomer (LON:SYNTS) tanked as its full-year results fell short of expectations.
CMC Markets fell further, having tumbled late on Monday after it warned that net operating income for FY23 was set to be more or less flat on the year following a "more challenging" environment in February and March.
888 was also weaker after the Gambling Commission fined William Hill a record £19.2m for customer protection and anti-money laundering failures.
Market Movers
FTSE 100 (UKX) 7,485.60 0.19%
FTSE 250 (MCX) 18,369.85 -0.86%
techMARK (TASX) 4,518.74 -0.31%
FTSE 100 - Risers
International Consolidated Airlines Group (LON:ICAG) SA (CDI) (IAG) 140.02p 2.03%
BP (BP.) 505.50p 1.83%
Glencore (GLEN) 457.80p 1.82%
Shell (LON:RDSa) (SHEL) 2,262.50p 1.34%
Sainsbury (J) (SBRY) 264.80p 1.34%
Endeavour Mining (EDV (LON:EDV)) 1,882.00p 1.24%
Halma (LON:HLMA) 2,143.00p 1.23%
Anglo American (AAL) 2,569.00p 1.18%
Rio Tinto (RIO) 5,283.00p 0.97%
Convatec Group (CTEC (LON:CTEC)) 222.00p 0.82%
FTSE 100 - Fallers
Ocado Group (OCDO) 426.50p -5.66%
Hargreaves Lansdown (LON:HRGV) (HL.) 766.00p -2.84%
Unite Group (LON:UTG) 869.00p -2.25%
SEGRO (SGRO) 702.00p -2.12%
Rightmove (RMV) 541.20p -1.81%
Kingfisher (LON:KGF) 251.60p -1.41%
St James's Place (STJ) 1,164.00p -1.36%
Coca-Cola (NYSE:KO) HBC AG (CDI) (CCH) 2,180.00p -1.22%
Centrica (LON:CNA) 102.15p -1.16%
Barratt Developments (LON:BDEV) 444.00p -1.16%
FTSE 250 - Risers
Energean (ENOG) 1,282.00p 9.01%
Softcat (SCT) 1,232.00p 6.76%
Ithaca Energy (ITH) 152.55p 3.28%
Harbour Energy (LON:HBR) 264.00p 3.04%
Aston Martin Lagonda Global Holdings (AML) 222.40p 2.77%
Senior (SNR) 155.80p 2.64%
W.A.G Payment Solutions (WPS) 93.80p 1.96%
Hunting (LON:HTG) 236.00p 1.94%
Ninety One (N91) 180.80p 1.69%
JPMorgan (NYSE:JPM) Emerging Markets Inv Trust (JMG) 106.80p 1.33%
FTSE 250 - Fallers
TUI (LON:TUIT) AG Reg Shs (DI) (TUI) 704.40p -49.07%
Synthomer (SYNT) 107.40p -13.32%
Molten Ventures (GROW) 265.40p -5.55%
Bytes Technology Group (BYIT) 360.40p -3.74%
CMC Markets (CMCX) 177.60p -3.58%
Workspace Group (LON:WKP) 418.40p -3.42%
Urban Logistics Reit (SHED) 116.00p -3.33%
Barr (A.G.) (BAG) 525.00p -3.14%
Balanced Commercial Property Trust Limited (BCPT) 77.60p -3.00%
LondonMetric Property (LMP) 161.60p -2.94%
