The FTSE 100 has somewhat recovered after a dreadful afternoon and has managed to pick up from earlier lows thanks to a rally in oil prices.
The FTSE ended the day flat at 6,322.4 points, up just two points from 6,319.91 on Wednesday. Investors were initially caught off-guard by the news that the Bank of Japan would not extend its stimulus plan.
The top of the blue-chip index was commodity stock heavy as oil resumed a rally which has taken prices to a new 2016 peak.
At the London close Brent crude was up 0.8 per cent at $47.53 a barrel while US oil also hit a new high of $45.50.
Anglo American led the FTSE higher, up 8.1 per cent, while fellow miner Rio Tinto climbed 4.3 per cent. Fresnillo, BHP Billiton, Glencore, and Randgold Resources all climbed between two and 2.3 per cent.
Investors applauded Anglo American's move to sell part of its Brazilian businesses for a whopping $1.5bn (£1bn).
Banks performed less well however ahead of Royal Bank of Scotland's first quarter results tomorrow morning.
The bank has already begun piling on the bad news, warning this afternoon it would be unlikely to make it's required deadline of the end of 2017 to carve out challenger bank Williams & Glyn.
Augustin Eden, research analyst at Accendo Markets, said:
The UK banks have once again handed investors a big dollop of volatility around first quarter results, showing that the devil is indeed in the details of sometimes complex and confusing earnings reports.
Lloyds Banking Group shares kicked off today’s session in particularly vicious fashion as fuel for both bulls and bears was mined from its results statement. Barclays shares rallied four per cent yesterday before the contrarians came along and took the price negative. And what do we have tomorrow? RBS!
The state controlled bank said its costs would likely be significantly higher and blamed "the complexities of Williams & Glyn's customer and product mix, the programme to create a cloned banking platform" for the delay."
RBS closed down 2.9 per cent, paring back an earlier fall of over five per cent.
Lloyds dropped by 1.6 per cent following its first quarter results that revealed profits fell by almost 50 per cent as investors redeemed £800m of bonds.
CMC Markets analyst Jasper Lawler said:
European markets recovered from sharp early losses as strength in the basic resource sector following a fresh 2016 peak in oil prices unwound some of the dismay at no addition to stimulus from the Bank of Japan.
Poor quarterly results from Lloyds and another delay to the spin-off of Williams and Glyn by RBS sent banking shares lower on the FTSE 100. Mining shares were the biggest risers with Anglo American gaining over five per cent.
There were also heavy sell offs in companies that had gone ex-dividend.
Legal & General led the fallers, down by 4.4 per cent, while Informa and Merlin were down between 1.7 and 2.4 per cent respectively as they traded without entitlement to their latest dividend payout.