The commodity-heavy FTSE 100 was up 0.5% by 1003 GMT and the domestically-oriented FTSE 250 was down 0.1%.

The benchmark index hovered at one-year highs, having touched similar levels last week.

The blue-chip FTSE 100 index is set to end the January-March quarter with a 3% gain, its highest since the last quarter of 2022. For the week, the index is set to log a 0.4% gain.

Most base metals prices rose, boosted by signs of stabilisation in China's broader economy that supported mining stocks to gain 1.2%. [MET/L]

Banks stocks climbed 1.4%, leading sectoral gains.

FTSE 100 rallied last week on back of dovish messages from major central banks, and while the rally has somewhat continued this week, it has lost some steam.

"Investors are taking a lot of positive sentiment from last week. The reassurances from last week are being reflected in markets," said Thomas Gehlan, senior market strategist at SG Kleinwort Hambros.

Investors will be focussed on a key reading of the U.S. personal consumption expenditure price index (PCE), the Federal Reserve's preferred inflation gauge, due on Friday, when most global markets will be shut for the Good Friday holiday.

On the macro front, official data confirmed Britain's economy entered a shallow recession last year, with gross domestic product shrinking by 0.1% in the third quarter and by 0.3% in the fourth quarter, unchanged from preliminary estimates.

JD Sports climbed 6.8% after the sportswear retailer said its pretax profit for the year to Feb. 4 would meet guidance it downgraded in January in the range of 915-935 million pounds.

Spirent Communications jumped 10.7% on agreeing to Keysight Technologies's offer, valuing the firm at 1.16 billion pounds ($1.46 billion).

M&G, Smith & Nephew and Taylor Wimpey were down between 1% and 6% as they traded ex-dividend.

(Reporting by Siddarth S and Pranav Kashyap in Bengaluru; Editing by Sohini Goswami and Tasim Zahid)

By Siddarth S and Pranav Kashyap