The FTSE-100 index closed up 42.3 points, or 1 percent, at 4,453.9 - its best closing level since the start of July.
The six-day rally added more than 2 percent to the index.
US light crude dipped below $43 a barrel for the first time since early August as the commodity clocked up its fifth day of declines.
"I think it's a proper correction, the price was squeezed way too high," said Jim Wood-Smith, equity analyst at Gerrard.
British Airways and mid-cap no-frills rival easyJet put on 2.4 percent and 7.5 percent, respectively, as steady oil prices eased the threat of a profit squeeze on fuel-hungry companies.
The advance, also helped by growing expectations that UK rates will not go up much further, took in a wide range of sectors, notably beaten-down media stocks.
Broadcaster ITV was among the top gainers, rising 2.8 percent, while BSkyB, hammered by concerns over the strategy of its chief executive James Murdoch, added 2.8 percent.
"There's a more sanguine view of interest rates," said Gerrard's Wood-Smith. "And people are looking to buy bombed out stocks."
Banks joined in, with global giant HSBC adding 0.8 percent, helped also by its exposure to rising markets in Asia.
But shares in security-to-pest control company Rentokil missed out on the advance, sliding 3.9 percent after speculative investors cut positions in the firm after it ruled out a break-up and reported a 10 percent fall in first-half profit.
"The mark-down is primarily disillusionment. There's been an awful lot of stuff leaked in the press and come the day of the party, you open the party bag and there's nothing in there," said a trader.
Corporate news-flow elsewhere was largely encouraging.
Shares in Tomkins added 2 percent after it beat forecasts with a 6 percent rise in first-half profit, as recovering economies lifted demand in its key markets while costs fell.
But hotel and gaming firm Hilton dipped 0.1 percent despite reassuring results. Dealers said investors were locking in recent gains won in anticipation of solid results.
Investment bank Credit Suisse First Boston said Hilton's outlook was uninspiring, noting that the company expected a full recovery in the market to come through in 2005 while there was nothing positive in terms of the betting outlook.
Among mid-caps, shares in food firm Arla lost more than 4 percent after it said supermarkets group J. Sainsbury would drop it as a milk supplier. Scottish milk processor Robert Wiseman Dairies, up 6.4 percent, said it would supply half the milk for Sainsbury from next year. It currently supplies 20 percent.