By late morning the FTSE 100 was comfortably back over 6000 points after a 1.25% rise. The FTSE 250 put on 1.6% to sit at 16,288.
The rally was lead by banks, with Lloyds Banking Group, Barclays and Standard Chartered all making significant gains.
Homebuilders Taylor Wimpey and Barratt Development also had a good morning.
This trading session could not reverse all of the fall seen this week, with the FTSE 100 remaining down 1.6% over the five days and the FTSE 250 down 3.1%.
One company in the index that bucked the trend this morning and struggled was utilities company National Grid. Uncertainty generated by talks of a breakup lead to shares falling over 1%.
“Yet again the FTSE 100 is showing its traditional reluctance to stay below 6000 for an extended period; the history of the index since August has been one of bouncing around 8% either side of the big round number,” said IG markets analyst Chris Beauchamp. “An easing of Brexit fears may well be behind why a number of UK-focused assets are in demand this morning, with UK banks sitting at the top of the index, as once again an absence of polls acts to calm the market.”
Beauchamp noted that a strong finish in the US markets yesterday will have helped things over in London.
“The bounce in US markets last night confirms that the great consolidation of 2015/2016 goes on, even if it has yet to morph into a new rally to all-time highs,” he said. “The fear of missing out on potential upside is evidently still there for many investors, who are understandably reluctant to run the risk of losing out should the market rally, yet find themselves paralysed by concerns about Fed tightening and economic growth. A quiet end to the week for economic data is perhaps fitting given the events that are to come in a weeks’ time.”
