Global markets were back on the front foot yesterday as investors took heart from reassuring comments by the next boss of the US Federal Reserve and recovered some of the heavy losses of the previous session.
Janet Yellen, who takes over from Ben Bernanke at the end of January, said the Fed had "more work to do" to help the US economy, easing market jitters about the tapering of asset purchases.
The FTSE 100 Index climbed 36.1 points to 6666.1 while stock markets in Germany and France surged ahead by more than 1%.
London's top-flight dropped by nearly 100 points on Wednesday on fears about US tapering as well as worries about the future of monetary stimulus in the UK following the Bank of England's quarterly inflation report.
The Bank said a key unemployment threshold, used to determine when interest rate rises might be considered, would be reached sooner than had been expected.
Anxiety about the removal of stimulus, particularly the Fed's multi-billion dollar monthly quantitative easing programme, has weighed on stocks from time to time in recent months so Ms Yellen's remarks came as a relief.
The comments, taken from the prepared text of evidence to the Senate Banking Committee ahead of her appearance, saw New York's Dow Jones Industrial Average rise overnight.
As the remainder of her live testimony before US legislators unfolded, it did little to dampen the mood and the Wall Street index was modestly ahead again during the latest session by the time of the close in the UK.
On currency markets, the pound was flat against the greenback at $1.61 and against the euro at €1.19.
In London, the majority of blue-chip stocks were in positive territory, although Centrica slid 5% after it warned it would fail to meet the City's expectations for annual profits.
The firm said overall group earnings, which had been expected to rise by 3% to 4%, were now likely to remain flat on the £2.7 billion reported in 2012 after being affected by challenging conditions in its business supply arm across the UK and US. Shares fell 18.6p to 345.3p.
On the risers board, supermarket Sainsbury's enjoyed a second day of gains in the wake of its well-received 7% rise in half-year profits, as a clutch of broker upgrades lifted the stock higher still.
Shares rose another 3.9p to 414.6p, despite a £1bn price-cutting strategy unveiled by US-owned rival Asda which saw other grocers lose ground.
Tesco slipped 8.6p to 356.2p while Morrisons also fell, off 7.8p at 266.2p.
The biggest FTSE 100 risers were Aberdeen Asset Management, up 12.3p to 419.2p, Shire up 79p to 2840p, WPP up 35p to 1342p and ITV up 4.6p to 186.4p.
The biggest FTSE 100 fallers were Centrica, Morrisons, Tesco and Rexam down 12p to 506.5p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article