By Sarah Turner

London's top index advanced to a fresh annual high on Monday, with gains from telecom Vodafone Group and oil and gas companies helping the advance.

The U.K. FTSE 100 index rose 1.2%, or 59.52 points, to 5,221.39. It's the first time the index has traded over 5,200 since September last year.

Other European shares were higher, with Philips making sharp gains in Amsterdam after reporting a surprise quarterly profit on the back of cost-cutting and better-than-expected sales.

Oil and gas firms were helping the advance in London, with BP (BP) shares up 1.6% and BG Group shares up 1.4%. Over the weekend, the Sunday Times reported that BG has received an unsolicited bid for some of its power generation business.

Miners were also higher, with Vedanta Resources up 2.7%.

The commodity-sector gains came as light sweet crude and metal futures climbed. In the currency markets, the U.S. dollar fell against the euro but rose against sterling. The pound declined 0.1% to $1.5822 against the greenback.

Prime Minister Gordon Brown plans to announce that the government hopes to cut the country's debt pile by 16 billion pounds ($25.4 billion) by selling government assets and real estates, according to reports.

"Fears over the outlook for U.K. economic growth are rising," commented equity strategists at Morgan Stanley.

Still, "any increase in investor concern over the U.K. economy and/or political situation is unlikely to be a big negative for U.K. equities per se. If anything, the associated sterling weakness is a positive support," they added.

Vodafone Group (VOD) helped the gains in London, with shares in the index heavyweight up 2.6% after it detailed a cost-cutting move.

The mobile telecom giant said that it intends to transfer the listing of its American Depositary Receipts from the NYSE to the Nasdaq Global Select Market to benefit from lower annual listing fees.

Meanwhile, Standard Chartered shares rose 2.4% after the banking group said that it has received approval to list in India, Dow Jones Newswires reported, citing the head of the bank's Indian unit.

Still, Barclays (BCS) shares lost ground in the banking sector, down 1.1%. The lender is planning to spin off a 4 billion pound ($6.3 billion) portfolio of complex credit assets, according to a report in the Financial Times, citing people familiar with the plan.

Outside the top index, shares of commercial-television broadcaster ITV rose 2.5%.

It was upgraded to buy from neutral at Goldman Sachs, which sees a "modestly stronger-than-expected recovery" in the third and fourth quarters for television ad markets.

Meanwhile, ITV said that John Cresswell, chief operating officer, will become interim chief executive but then leave the group after a permanent CEO is appointed.

He will start when its chairman, Michael Grade, is replaced, and Crispin Davis and Michael Bishop both have said that they are not candidates for that role.

Shares of retailer JJB Sports rose 3.8%.

The firm said, following an investigation by its board, that rumors about the personal financial affairs of its executive chairman David Jones are "totally unfounded" and that the company is continuing with its 100 million pound ($158.2 million) capital raising.

Press reports last week said the share-sale plans had been halted while the firm investigated the rumors about the financial relationship between Jones and JJB's former CEO Dave Whelan.

International Personal Finance , which provides home credit to customers in emerging markets, jumped 14.9%.

The firm said that it has made good progress in the third quarter of 2009 and that, if the current improving trend continues, it's likely to post fiscal-year results materially ahead of market expectations.