The FTSE 100 index rose 2%, with cigarette maker Imperial Brands surging 12.3% as it secured a new credit line and said it was not seeing any major hit to business from the coronavirus pandemic.

Oil prices steadied following a near collapse on Monday, as U.S. President Donald Trump and Russian President Vladimir Putin agreed to discuss stabilising energy markets, boosting Royal Dutch Shell Plc and BP Plc by more than 6%. [O/R]

Investors took cheer from data that showed China's activity unexpectedly expanded in March from a collapse the month before, even as analysts caution that a durable near-term recovery is far from assured.

"What we're really looking at the China data is to see if it's an indicator of how quickly Europe and the U.S. can get back to work potentially after their lockdown," said UBS strategist Kiran Ganesh.

"If the lockdown ends in May, which is what we're broadly pricing in, then we may see a similar path of what we've seen in China."

The FTSE 100 has shed a quarter of its value so far this year, despite recovering more than 15% from mid-March lows as most countries enforced stay-at-home orders to curb the coronavirus pandemic, halting business activity.

Latest numbers showed the death toll in England from the coronavirus outbreak rose 29% to 1,651.

Britain's midcap stocks recorded their worst quarterly decline ever, although sentiment has stabilised towards the end of March after unprecedented stimulus by policymakers to cushion the pandemic's economic blow.

The index rose 3.3% on Tuesday, still down more than 30% so far in 2020.

"This is the calm before the storm," Mazen Issa, a strategist at TD Securities wrote in a client note.

"Economic data this week will capture the early stages of a collapse. That, alongside no earnings guidance could spell trouble for risk assets."

Luxury carmaker Aston Martin fell 12.3% after saying it is furloughing some employees as it handles the fallout from the outbreak.

Travel stocks have also been hit hard in the past month as passenger demand evaporated, with the wider travel and leisure index <.FTNMX5750> losing 45% in the first quarter.

Supermarket chains Tesco and Sainsbury's have held up as industry data showed British consumers spent an additional 1.9 billion pounds on groceries in the four weeks to March 21.

Technology firm Smiths Group rose about 10% after saying it was looking at cutting costs and that it should be eligible to access funding from the Bank of England's Covid Corporate Finance Facility.

By Sruthi Shankar and Devik Jain