FTSE 100 index closes higher as price of oil rebounds and share prices at miners and banks including HSBC, RBS, Lloyds and Barclays rise and Rolls-Royce’s share price rockets
Having taken a pounding on Thursday, the FTSE 100 index closed sharply higher today as the price of oil rebounded.
The UK's blue chip index closed 3.08 per cent higher at 5,707 points, led higher by Rolls-Royce, banks and miners.
The price of oil rose more than three per cent to nudge over $31 a barrel this morning, after an Opec minister hinted a coordinated production cut could be on the cards.
"European markets rebounded on the last day of what has been a tumultuous week for markets. Most of the underlying issues remain unresolved but the dramatic re-pricing of risk that took place through Thursday could only be sustained for so long without a let-up," said Jasper Lawler, markets analyst at CMC Markets.
"The most beaten-up sectors of energy, basic resources and financials led the recovery as oil prices came off their lows and European banks received some more positive news."
Read more: Rolls-Royce slashes dividend for the first time in 24 years
"The catalyst for the move higher in the energy sector has been jump in the price of oil overnight when rumours surfaced that Opec was ready to discuss a production cut," he added.
With the price of oil rising, it wasn't surprising that oil companies also helped lead the surge.
BP's share price rose 7.17 per cent to 332.5p, while Shell jumped 5.57 per cent to 1,526p. BG Group was trading 4.12 per cent higher at 1,062p.
Banks were also trading higher. Barclays' share price rose 6.32 per cent to 157.2p, while HSBC and Royal bank of Scotland jumped 4.82 per cent to 440.4p and 7.43 per cent to 240.1p respectively.
Read more: What a week – Over $1 trillion wiped off global stock markets
Lloyds' share price rose 4.42 per cent to 58.48p and Standard Chartered jumped 10.95 per cent to 429p.
"[Banks have had] a lot of pressure on them to increase their lending through all the quantitative easing cash that's coming their way and the negative rates that we've seen begin to materialise in central banks," Alastair McCaig, market analyst at IG, said.
Rolls-Royce also surged. Its share price rose 14.43 per cent to 606p after it announced plans to cut its dividend for the first time in 24 years as it undergoes a restructuring in order to restore earnings growth.
Miners also managed to climb, led by Anglo American. Its share price rose 18.36 per cent to 373.95p, while Rio Tinto was up 8.36 per cent at 1,847.5p per share. BHP Billtion was trading 9.86 per cent higher at 696.6p per share.