The blue chip FTSE 100 index <.FTSE> was up 1.1 percent at 6,968.57 points by the close, mirroring gains in the broader European market.

Gains were broad-based, with only the mining and materials sector in negative territory ahead of the results of the U.S. Federal Reserve's meeting on Wednesday.

The FTSE 100 posted its highest close since October, and recouped all of the previous session's 0.9 percent loss.

Sky (>> SKY PLC) rose 1.7 percent to 988.5 pence following a dip in the previous session, but still traded below Twenty-First Century Fox Inc's (>> Twenty-First Century Fox Inc) 1,075p per share offer for the firm, which sent shares surging last Friday.

British public sector pension funds were the latest to cast scepticism on the deal, calling for an "appropriate" premium for shareholders and calling for regulatory scrutiny of any deal.

Shares in broadcaster ITV (>> ITV plc) rose 3.7 percent, with one trader saying the Fox bid for Sky made other M&A in the sector more likely.

"ITV is... higher on the back of speculation that it may become the subject of a bid in the wake of 21st Century Fox’s bid for Sky," said Michael Hewson, chief market analyst at CMC Markets.

BT (>> BT Group plc), which increasingly competes with Sky in internet provision and televised football, rose 3.7 percent.

Elsewhere in Europe, French media group Vivendi (>> Vivendi) said it had raised its stake in Italy's Mediaset (>> Mediaset SpA), fuelling the prospects of a hostile takeover bid.

Top FTSE 100 riser was engine-maker Rolls Royce (>> Rolls-Royce Holding PLC), up 4.2 percent and recovering from a fall on Monday following negative readacross from U.S. President-elect Donald Trump's criticism of the costs of Lockheed Martin's F-35 fight jet programme.

Top fallers were miners. A drop in the price of copper hit shares in Antofagasta (>> Antofagasta plc), Rio Tinto (>> Rio Tinto plc), BHP Billiton (>> BHP Billiton plc) and Glencore (>> Glencore PLC), which fell between 2 to 4.6 percent. [nL4N1E83AQ]

Commodity prices tend to come under pressure when real interest rates rise as investors put capital into higher-yielding assets.

"They've had quite a strong run, the miners, of late so if we see a strengthening dollar and a weakening commodity price in the face of a rate hike, that's going to be slightly negative for the miners in the short-term," said Jonathan Roy, advisory investment manager at Charles Hanover Investments.

Among mid caps, digital payment provider Paysafe (>> Paysafe Group Plc) fell 17.6 percent after a blog post alleging that the company was enabling illegal gambling in China, which the firm denied.

Cyber security firm NCC Group (>> NCC Group PLC) fell 10 percent after the firm cut its 2017 earnings forecast, with analysts at Jefferies pointing to project cancellations as impacting profitability.

(Editing by Gareth Jones)

By Alistair Smout and Kit Rees