The FTSE 100 index closed higher on Thursday, stabilising after trading with some volatility in the morning.
The UK's blue-chip index ended the session 1.77 per cent higher at 5,773 points, spurred on by European Central Bank President Mario Draghi’s pledge to review its monetary policy in March.
The ECB decided not to cut interest rates further today, but many believe Draghi is intent on conducting more stimulus, but has been held back by other members of the ECB's governing council.
“Since the ECB just recently expanded the duration of the asset purchase program, the most likely policy change in March would be further cuts to the deposit rate and the inclusion of different financial instruments,” said Jasper Lawler, analyst at CMC Markets. “An increase to the size of monthly purchases seems like a tall order when the December ECB minutes signalled a number of participants were unsure about the need for any extra stimulus.”
He added that the recovery was supported by a more stable oil price which swung between gains and losses, an improvement over the sharp drop that took US crude prices to below $27 per barrel yesterday.
Rio Tinto wasn't far behind, rising 5.99 per cent to 1,672p per share. Antofagasta rose 5.58 per cent to 365.4p per share.
Read more: FTSE 100 is officially in a bear market
Pearson was the biggest riser, up 17.41 per cent to 772p per share. This morning the publisher unveiled drastic restructuring plans, including 4,000 job cuts.
The rebound comes after the index entered bear market territory on Wednesday, down over 20 per cent from the high it reached in April.