The FTSE 100 closed higher after worries about the banking sector following Credit Suisse’s sudden takeover sparked further volatility in the markets.
London’s top index opened firmly lower, dropping to its lowest since November last year, before trading jitters settled and it bounced back to positive territory.
Banking stocks were unsurprisingly still the day’s weakest performers, after the Swiss authorities agreed an emergency rescue deal for UBS to snap up its rival Credit Suisse.
Standard Chartered and Barclays were the biggest fallers on the FTSE 100 at the close of play as a result, closing down 22.4p to 611.6p and down 3.74p to 135.82p respectively.
Ultimately, while it is a shock to see a global bank disappear so quickly, it is reassuring to see governments and regulators moving quickly to seal off any source of further contagionChris Beauchamp, IG
However, the index was supported by a bumper session for London-listed commodity firms.
The FTSE 100 moved 0.93%, or 68.45 points, higher to finish at 7,403.85.
Chris Beauchamp, chief market analyst at IG, said: “What began as a very ‘sea of red’ kind of day has turned into a rebound, with stocks clawing back losses.
“Ultimately, while it is a shock to see a global bank disappear so quickly, it is reassuring to see governments and regulators moving quickly to seal off any source of further contagion.”
The other major European markets performed similarly, with reduced losses among banks driving the upward swing through the session.
The German Dax rose by 1.08%, and the French Cac 40 increased by 1.34% at the close.
Meanwhile, sterling made gains against the dollar, which was dented by increased expectations that the Federal Reserve is likely to take a dovish stance at its key policy-setting meeting on Wednesday.
The pound was up 0.79% to 1.227 US dollars, and rose by 0.25% to 1.144 euros at market close in London.
In company news, Glencore was among the day’s top performers as commodity firms benefited from a dip in the dollar.
The FTSE 100 miner also gained as a result of an upgrade from analysts at UBS, who returned the stock to a “buy” rating following a sell-off in recent months.
As a result, shares in the company moved 18.6p higher to 451.25p at the close of play.
Elsewhere, shares in education support services firm Tribal Group tumbled after it said Nanyang Technology University has sought to terminate its contract and reserved rights to claim damages.
Tribal delayed its annual results announcement as a result and shares slipped by 11p to 39p.
Water firms Pennon, United Utilities and Severn Trent all made gains during the session despite the industry regulator Ofwat announcing new powers over the payment of dividends.
Meanwhile, the price of oil edged lower over concerns about the economic outlook, with several banks downgrading their growth outlooks for Europe.
The price of Brent crude oil decreased by 0.56% to 72.49 US dollars per barrel when the London markets closed.
The biggest risers on the FTSE 100 were Anglo American, up 122p to 2,626p, Fresnillo, up 34p to 744p, Antofagasta, up 59p to 1,503p, Endeavour Mining, up 71p to 1,831p, and Glencore, up 16.7p to 449.35p.
The biggest fallers on the FTSE 100 were Standard Chartered, down 19p to 615p, Barclays, down 3.2p to 136.36p, Centrica, down 1.4p to 99.8p, Scottish Mortgage Investment Trust, down 9p to 662.2p, and Smith & Nephew, down 8p to 1,161.5p.