The top share index snapped its worst losing run since 2003 on Friday, with miners and banks, sectors badly beaten in the previous few sessions, leading the rebound.
Blue chips rose 37.08 points, or 0.7 percent to 5,164.65, ending their worst run of consecutive daily falls since January 2003.
The index traded just 75 percent of its already anaemic average 90-day volume.
Stocks that had suffered from the market's weakness this week featured prominently on the FTSE leaderboard.
Royal Bank of Scotland added 4.3 percent, Admiral climbed 3.1 percent and Thomas Cook was up 10.2 percent, having fallen around 75 percent on funding concerns earlier in the week.
HSBC had said prior to Friday's bounce that it was dangerous to be fully risk-averse as there was a possibility that equities recover surprisingly sharply and it wanted at least part of its portfolio to be positioned for such a situation.
The broker highlighted Rio Tinto and Experian among its UK plays in this scenario, to balance the more defensive qualities of Morrison and Vodafone.
Traders warned any gains should be taken in context of the broader performance of the index.
The FTSE 100 had shed more than 7 percent in the last nine days as stresses surrounding the euro zone debt crisis remain.
Angus Campbell, head of sales at Capital Spreads, said: Today's rally comes with a note of caution as volumes were particularly low and so there are doubts over its sustainability.
An Italian bond auction was also poorly subscribed reminding us that investors still remain sceptical when it comes to a lasting resolution to the crisis.
A Dutch-based trader described the most recent Italian bond auction as awful, after the debt-ridden country paid a record 6.5 percent to borrow over six months and its longer-term borrowing costs soared far above levels seen as unsustainable for public finances.
Traders said talk that an EU bailout mechanism will not involve the private sector was also a cause for the relief rally.
Defensive stocks, those that tend to outperform in poor market conditions, featured heavily on the upside, a clear sign investors remained wary of the poor macroeconomic climate confronting corporates.
Drugmakers GlaxoSmithKline and Shire rose 1.1 and 1.4 percent, respectively. British American Tobacco was up 0.6 percent, while power provider National Grid climbed 1.9 percent
GROWTH CONCERNS REMAIN
Investors are concerned that the region's crippling debt situation and lack of cohesive action from politicians in preventing contagion could cause the break-up of the euro zone and tip the global economy into recession.
Goldman Sachs said it expects the euro-area economy to slide into recession in the fourth quarter and forecasts just 0.1 percent growth for 2012, but funding difficulties for banks represent a clear downside risk to this forecast.
The banking sector's problems could at some point lead to a significant worsening of funding conditions for corporates and households, which in turn could turn the moderate recession we are forecasting into something more akin to the 2008/09 experience, the bank said.
The FTSE 100 now trades on a price to earnings ratio of 9.86 times, compared with a historical average of around 14 times, while it has a combined price-to-book ratio of 1.4, Thomson Reuters StarMine data shows.
The euro zone debt crisis and the austerity measures governments are undertaking to compact bulging debt piles, continues to hamper corporate earnings.
Outdoor goods retailer Blacks Leisure fell 11.43 percent and faces a battle to survive after becoming the latest British retailer to issue a profit warning in the run-up to Christmas.
Severn Trent was among the day's biggest casualties, off 1.7 percent, after the water company reported a slightly bigger-than-expected drop in underlying first-half pretax profit.