The FTSE 100 <.FTSE> top share index was up 1.3 percent at the close with gains in mining stocks and big exporters helping it outperform the domestically tilted FTSE 250 <.FTMC> index, which gained 0.9 percent after hitting two-year lows on Monday.

Trading turned volatile towards the close after reports said lawmakers had enough letters to trigger a no-confidence vote in Prime Minister Theresa May's leadership, hours after German leader Angela Merkel ruled out further negotiations on Brexit.

Investors remained highly cautious as Europe's second largest economy was faced with several options regarding its divorce from the EU following May's decision on Monday to call off a parliamentary vote on her Brexit deal.

"It's virtually impossible to predict the outcome but we take a relatively neutral stance," said Nigel Bolton, chief investment officer of international equities at BlackRock.

"In the UK, we're keeping our neutral stance with a tilt to international earners. If we do come up with a deal, there's upside on the domestic side. But he says there’s still 30 percent downside risk to domestically focused equities even after the huge sell-off so far," he added.

Materials provided the biggest lift to the FTSE, as metal prices gained ground on renewed optimism over the China-U.S. trade dispute. [MET/L]

Shares in heavyweight miners Anglo American, Rio Tinto, and Glencore rose 3.3 to 5.5 percent.

WPP rose as much as 8 percent after the world's biggest advertising firm said it would prioritise dividends over share buybacks as it laid out a three-year business plan.

The shares pared some gains to end up 4.8 percent.

"We give a cautious welcome to the new strategy announced this morning but feel it could have been more ambitious and wide-ranging," said Liberum analyst Ian Whittaker.

GlaxoSmithKline rose 0.7 percent, tracking gains in its sector and following an upbeat note from Jefferies on prospects for large-cap European pharma firms.

Banks were a weak spot, with shares in Lloyds and Royal Bank of Scotland both hitting their lowest level since 2016. They ended down 1.1 and 0.3 percent respectively.

HSBC, which instead has a big overseas presence, rose 0.9 percent.

Among other domestically exposed stocks, Royal Mail hit a new record low before recovering to end up 1.4 percent, while WM Morrisons erased earlier losses on market rumours that the UK supermarket chain could be subject to a takeover approach by Amazon.com Inc.

Standard Life Aberdeen fell 1.9 percent, leading losers on the FTSE after RBC cut the insurance company to "sector perform" from "outperform".

Property and casualty insurer Lancashire rose after an upgrade from the same broker.

Ashtead rose 3.6 percent after predicting full-year results would beat expectations, as its U.S. Sunbelt business rented out more industrial equipment in the first half of the year.

(Reporting by Danilo Masoni, additional reporting by Jospehine Mason in London, editing by Larry King and Ed Osmond)

By Danilo Masoni