LONDON'S blue chip index started to bounce back from a major sell-off that wiped trillions of pounds off global markets this week in response to fears that rising inflation could spark interest rate hikes.
The FTSE 100 Index ended the day up 1.93 per cent or 138.02 points at 7,279.42 points, breaking its losing streak and helping it recover from a plunge on Tuesday when blue chip stocks saw nearly £50 billion lopped off their value.
Indexes across Europe posted gains, with Germany's Dax up around 1.9 per cent and the Cac 40 in France lifting by 1.7 per cent.
Across Asia, Tokyo's Nikkei 225 Day closed 0.16 per cent higher, though the Hang Seng Index in Hong Kong remained down by 0.89 per cent.
Markets were taking their cues from across the Atlantic after Wall Street swung back into the black in overnight trading and continued to push higher after markets opened on Wednesday.
The global equity sell-off had been building since last Friday when traders became spooked by the prospect of tighter monetary policy after the US posted strong average earnings data.
Despite rising share prices, investors seemed to be taking a more cautious approach.
David Madden, a market analyst at CMC Markets UK, said: "Equities are in recovery mode today after enduring a turbulent week. A combination of shorting covering and bargain hunting is helping the markets today.
"It has been a brutal week for investors, but some are keen to step in and take advantage of the fall in prices. There is still a sense we could be in for another leg lower, and for that reason some dealers are reluctant to get back into the market."
On the currency markets, the pound took a tumble against a stronger US dollar to trade at 1.388, but rose 0.3 per cent versus the euro to 1.130.
Brent crude prices were down nearly two per cent at $65.88 per barrel, as investors reacted to the latest data from the Energy Information Administration (EIA) which showed a higher than expected rise in gasoline inventories - reviving fears over a global energy glut.
In blue chip stocks, pharma firm GlaxoSmithKline jumped 42.6p to 1,285.4p after reporting rising full-year sales and profits, and pointing to a pipeline of new products that will help its performance in 2018 - including those to treat lung conditions and shingles.
Tesco rose 2.6p to 202.5p despite the supermarket being faced with an equal pay case by women who claim they are being paid less than men for work of equal value.
Lawyers estimate that the company could be faced with a bill of around £4 billion as a result.
Imperial Brands climbed 30.5p to 2,760p as the tobacco giant assured that annual earnings were still on track despite a first-half hit from the collapse of UK wholesaler Palmer & Harvey, the rising pound and tighter regulation.
Away from the top tier, the FTSE 250 Index rose 429.09 points to 19,691.65 points, helped by a surge in Redrow stocks that ended the day up 32p at 625.5p after the group chalked up a 26 per cent rise in half-year pre-tax profits to a record £176 million, on the back of higher selling prices and a jump in completions.
Shares in utility giant Severn Trent rose 54.5p to 1,870.5p as Britain's biggest listed water company reported a 12 per cent drop in water quality complaints, despite seeing more supply interruptions than usual.
It is now on track to pocket at least £50 million in outperformance payments from water regulator Ofwat.
The biggest risers on the FTSE 100 were Scottish Mortgage Investment Trust up 27.8p at 450p, Old Mutual up 12.1p at 234.8p, 3I Group up 40p at 935.6p, and ITV up 6.75p at 167.45p.
The biggest fallers on the FTSE 100 were Randgold Resources down 244p at 6,214p, Fresnillo down 35.5p at 1,249.5p, Antofagasta down 13.2p at 899.4p, and Smurfit Kappa Group down 6p at 2,444p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here