The Footsie climbed more than 1.7 per cent as traders eventually decided the Swiss central bank’s capitulation over the franc was more of a blessing than a threat.
The London market initially dropped following the shock announcement but the FTSE 100 closed 110.32 points higher at 6,498.78 as traders decided the move must be a precursor to Europe-wide quantitative easing (QE).
Alastair McCaig, market analyst at IG, said: “Such was the panic markets felt on the back of the collapse in the euro against the Swiss franc, vocal levels on trading floors bore more similarity to the phone-broking days of yesteryear than modern day platform trading.
“The collapse in equity markets has not lasted the day, however, as markets have taken the actions as a sign that European Central Bank QE is even more likely next week.”
The pound climbed to just below €1.31 against the crumbling euro, its highest level in nearly seven years.
The turmoil from the Swiss move also sent investors piling into the perceived safe haven of gold, helping Randgold Resources top the FTSE 100 risers’ board with a gain of more than 6 per cent, or 315p, to 5,265p.
Fellow miners also climbed - recouping losses in the previous session - with BHP Billiton up 5 per cent, or 63p, to 1,348p, and Fresnillo ahead by 39p to 855p.
Elsewhere oil heavyweights rose as the price of a barrel of Brent crude appeared to steady, following its recent slide, at around $49. BP, which announced it was cutting hundreds of jobs amid the oil plunge, added 10.4p to 392.6p. Royal Dutch Shell advanced 77p to 2,129p.
And in a busy session for trading updates, Primark owner Associated British Foods rose 112p to 3,147p after it reported another strong performance from its retail arm.