London Market Report
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(Close): Chip designer Arm Holdings led the market higher after it reported a rise in second quarter profits.
Arm's shares jumped 5.7% to 881p after it said profits in the quarter rose 9% to £94.2m.
Overall, the benchmark FTSE 100 index closed up 66.9 points, or 1%, at 6,795.34.
Confidence among investors rose on hopes that the tensions surrounding the downing of a passenger jet in Ukraine were easing.
This came after pro-Russian forces in Ukraine handed over the 'black box' flight recorders from the Malaysian plane that was shot down last week.
Royal Mail shares fell 3.4% to to 450p after it said parcel revenues for the full-year were set to be lower than expected.
However, the company said it was set to hit annual performance targets thanks to rising letters revenues and cost savings.
After rising on Monday following news of the departure of chief executive Philip Clarke, Tesco shares fell back 3.9% to 277.35p.