The FTSE 100 .FTSE closed up 161.9 points at 5,740.1 in a volatile session, having fallen as much as 4.3 percent earlier in the day. Volumes were at their highest level since October 2007.
The UK's blue chip index tumbled 5.5 percent on Monday, its largest daily loss since September 11, 2001, wiping nearly 77 billion pounds off the value of the index's constituent stocks. The FTSE 100 has lost 11 percent so far this year on concerns over the health of the U.S. economy.
The FTSEurofirst 300 index of top European companies also finished the day higher.