The UK market was also supported by a 3.4 percent rise in shares of British Airways owner IAG after Credit Suisse added the company to its "Focus List".

The FTSE 100 index ended up 0.3 percent at 6.419.15 points, after falling as much as 1.4 percent during the day, while major U.S. indexes surged 1.4 to 1.7 percent on strong results from 3M Co and Caterpillar.

"Caterpillar has given some tangible credence to the notion that the U.S. recovery is still on track with its better-than-expected figures and improving outlook," IG analyst Alastair McCaig said.

The FTSE has trimmed recent losses after hitting 15-month lows last week on concerns about the pace of global economic recovery and deflation in Europe. However, the index is still down more than 6 percent from a high about one month earlier.

Thursday's gains were limited by a slump in shares of supermarket operator Tesco and consumer goods group Unilever.

Unilever fell 3.7 percent after reporting a weaker-than-expected 2.1 percent rise in third-quarter sales on a slowdown in emerging markets, while Tesco was the worst-performing FTSE 100 stock, down 6.6 percent, after reporting a bigger than expected hole in its accounts.

Tesco found that mistakes in booking income had gone back further than initially thought, forcing it to scrap its profit outlook. The stock has fallen around 50 percent this year.

"The lack of any strategy announcement is disappointing," Brewin Dolphin analyst Nik Stanojevic said. "While the accounting issues are still outstanding, they (shares) could trade lower still. We are also concerned with company stating that it may need to protect and strengthen the balance sheet."

Tesco's woes also dragged down the shares of rival supermarket groups. WM Morrison fell 3 percent and Sainsbury retreated 1.8 percent.

The FTSE 350 Food & Drug Retailers index slumped 4.8 percent, extending the sector's total losses so far this year to more than 40 percent.

"Tesco is not in a position to offer full year profit guidance and management states the need to create head room for the future," Shore Capital analyst Darren Shirley said. "As such there is a further risk of earnings downgrades."

Property agency Foxtons, which is listed on the mid-cap FTSE 250 index, slumped 19.6 percent after the company said its core earnings would fall due to a sharp drop in demand in the London property market.

(Additional reporting by Sudip Kar-Gupta; Editing by Alison Williams and Hugh Lawson)

By Atul Prakash