By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Shares of Glencore International PLC and Xstrata PLC stood out among the biggest gainers in an upbeat U.K. stock market Tuesday as they moved closer to completing a high-profile merger.

Xstrata shares rose 3.1%, after the company's stockholders approved what would be an all-share merger with commodities giant Glencore , but they also rejected a controversial retention-pay package for executives.

Glencore's stockholders overwhelmingly approved the merger earlier in the day. Shares of Glencore moved 1.6% higher.

The FTSE 100 index added 0.2% to close at 5,748.10, extending gains after the equities benchmark rallied Monday by 2.4% -- its best daily performance in almost a year.

Shares of Vodafone Group PLC (VOD) gained 1.1% after Citigroup reiterated its buy rating on the stock.

Also higher in London, shares of InterContinental Hotels Group PLC (IHG) rose 2.7%, after Barclays lifted its rating to overweight from equal weight.

For the broader U.K. market, stocks wobbled for much of the session, as worries about France weighed on sentiment. The nation's economy is the second largest in Europe, following Germany.

Late Monday, Moody's Investors Service cut France's sovereign credit rating to Aa1, stripping its triple-A rating.

But the mood among investors improved in late action, after Egypt's president Mohammed Morsi reportedly said cease-fire between Israel and Hamas could come as soon as Tuesday. Better-than-expected U.S. housing data further helped lift the sentiment in Europe.

Banking shares traded weaker in London. Shares of Barclays PLC (BCS) lost 1.3% as heavyweight HSBC Holdings PLC (HBC) dropped 0.6% .

Also in retreat, shares of Capital Shopping Centres Group PLC nudged 0.4% lower after the firm said nearly 3.3 million new ordinary shares would be issued.

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