FTSE gains £40bn as global markets stage fight-back
The London market staged a bounce-back by gaining almost £40 billion after recent heavy declines, but has still endured its worst quarterly fall in four years.
The FTSE 100 Index in London surged 2.6% or 152.3 points to 6061.6 amid a global market fight-back as equity volatility shows no sign of abating.
Markets across Europe were also sharply higher, following gains overnight on Wall Street and in Asia.
But the top flight is down by 7% over the last three months compared to the previous quarter, the sharpest fall since September 2011.
Global markets have been spooked by a range of Chinese data showing its economy is slowing down.
These signs of weakness in the world's second biggest economy have gripped shares since August, with the commodity sector particularly badly hit.
The latest rebound comes after punishing losses in recent days, with the FTSE 100 shedding 200 points over the previous two sessions.
Michael Hewson, chief market analyst at CMC Markets UK, said: "European equity markets look set to post their worst quarter since 2011 and their second monthly decline in succession."
He blamed a slowing global economy, uncertainty about the Chinese market and the prospect of a US rate rise for the disappointing quarter.
Mining and trading giant Glencore was among those leading the fight-back after a dramatic 29% slump on Monday, with traders worried that the fall in commodity prices would leave it unable to pay its large debts.
The firm reissued a statement first released late on Tuesday assuring it was "operationally and financially robust" and pledging to slash its 30 billion US dollar (£19.8 billion) debt pile by a third.
Its shares rose by another 10% following a 17% bounce-back on Tuesday.
Sainsbury's was also leading the Footsie rally, with shares surging by 14% after it said full-year profits would now be "moderately" ahead of City expectations after narrowing sales declines in its second quarter.
The supermarket posted a 1.1% drop in like-for-like second-quarter sales - its seventh quarter of falling sales in a row but better than the 2.1% fall seen in the previous three months.
The state of the Footsie is a far cry from the euphoria earlier this year, when it reached a new record high above 7,000 before being held back by global anxieties over Greece's debt crisis, US interest rate policy and China's slowdown.