The FTSE 100 recovered from opening losses to tread positive territory thanks to an advance by miners and oils as investors bought into the recent weakness across the sectors.
Having given up 26 points at kick-off the FTSE 100 soon made up for lost ground and in early action stood 12.89 points higher at 6313.52.
Last week the blue chip index lost 6.6%, its worst weekly performance for over three years, against a backdrop of falling oil prices and central banks continuing to buck expectations they will engage in more monetary stimulus to counter slowing economies.
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Jasper Lawler, analyst at CMC Markets, says that after the performance last week, it now appears to have been a "fool's rally" since the FTSE 100 notched up a three-month low of 6,195 in mid-October.
He adds: "The ECB may still be looking to take the baton of quantitative easing in 2015 but with no further action taken by the Bank at its December meeting, the baton is still firmly rooted in Fed Chair Janet Yellen's hand.
"All eyes will therefore be on the Fed Reserve's latest policy statement and economic projections on Wednesday. Markets will be looking to interpret how the Fed's planned course of action over the timing of the first rate hike may have changed after the strong unemployment, wage and retail sales data seen in November."
Lawler reckons that a good chunk of the rally since October is thanks to Japanese Prime Minister Shinzo Abe and the Bank of Japan stunning the market late that month by announcing fresh stimulus. This weekend Abe's LDP party were re-elected to government in the snap elections he had called just a few weeks ago.
Lawler says: "The Bank of Japan's monetary policy statement on Friday will be the first indication over whether Abe's new vote of confidence will translate into additional monetary stimulus. It seems unlikely the BOJ would add to the QE programme within weeks of the last increase so any new stimulus may have to come from parliament."
The lack of more substantial stimulus measures from the ECB in particular is causing consternation among investors who have been anticipating it for a good while now. Lawler notes that European economic data was "fairly dire" last week with multiple countries edging towards if not already in deflation yet the euro managed to stage a recovery off its lows thanks to inaction from the ECB.
"There is scope for further strength if German confidence data continues the rebound started last month but the Eurozone CPI expected at a sanguine 0.3% will spurn calls for the ECB to act quicker next year," says Lawler.
Early newsflow included Rightmove revealing that asking prices for homes on sale fell by 3.3% in December the biggest monthly fall that Rightmove has recorded. The property website, however, reckons prices will rise by between 4% and 5% next year. For 2014 as a whole, asking prices rose 7%.
Oil and miners were mostly in positive territory early on. Notable gainers included BG (up 3.3%), Petrofac (2.5%) and Shell (1.6%). Amongst miners, Anglo American, Antofagasta and Rio Tinto were all edging ahead.
Elsewhere, baker Greggs was in demand after it signalled better than expected full year profits thanks to the mild autumn weather. Its shares rose 5.12% to 690.12.
Chemicals group Johnson Mattheyedged ahead 0.75% to 3225p after it revealed it has agreed to sell its gold and silver refining business to Asahi Holdings for £118m in cash.
BT Group was down a hefty 3.84% after weekend reports that it will this week choose between mobile-services company EE or rival provider O2 as a £10bn acquisition target.
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