The European Central Bank left rates on hold and made no clear promise of future action, but president Mario Draghi admitted that a cut had been discussed at yesterday’s meeting.
UK and other equity markets briefly trimmed gains in the aftermath, but sentiment remained upbeat, with the spotlight now on the Bank of England policy decision and a speech by US. Federal Reserve chairman Ben Bernanke, both due today.
Investors were also looking for developments in the Eurozone crisis, with Germany and European Union officials said to be urgently exploring ways to rescue Spain’s debt-stricken banks.
The FTSE 100 closed up 124.59 points, or 2.4 per cent at 5,384.11, recovering from a six-month intraday low of 5,229.76 set on Friday before the long weekend.
Miners were among the top performers, with Randgold Resources, Fresnillo and Anglo American all up around seven per cent.
If global central banks act to stimulate growth, that should boost demand for metals, to the benefit of the sector.
Expectations of “stronger stabilisation measures” prompted Nomura to reiterate its “overweight” rating on both the UK and Europe in a strategy note published yesterday.
Banks – which are most directly exposed to the Eurozone crisis through their bond holdings and loan books, and are also among the best placed to benefit from any central bank stimulus – outperformed, in part playing catch up with a 4.9 per cent jump in the Eurozone banking sector on Monday and Tuesday.