For once the European Central Bank didn’t disappoint markets as it launched a widely anticipated bond-buying programme.
The FTSE 100 Index added 68.59 points or 1 per cent at 6,796.63, with France’s Cac 40 and Germany’s Dax enjoying bigger gains, despite warnings that even this €1.1 trillion (£830 billion) scheme would not suffice to jump-start Europe’s ailing economy.
Tony Cross, market analyst at Trustnet Direct, said: “For now however investors are cheering the news with the FTSE 100 finding itself around the 6,800 mark at the close – a gain of 500 points since that surprise move by the Swiss National Bank spooked the market just a week ago.”
Meanwhile a better-than-expected trading update from Royal Mail helped its shares lift more than 3 per cent after it said it handled around 120 million parcels during December.
Trading conditions remain “highly competitive” with UK parcel revenues flat in the nine months to 28 December but shares still rose 15.3p to 445.8p on relief that the company continues to trade in line with expectations.
Smiths Group was the biggest blue chip riser as it renewed a deal with AT&T that keeps its worldwide offices connected. The shares climbed 5 per cent, up 54p to 1,136p, as Smiths said the deal would reduce operating costs while helping it to grow its global business.
Further evidence of an apparent stabilisation of oil prices at near the $50 a barrel mark helped boost a number of energy stocks, with Tullow Oil up 3.8p to 388.3p and BG Group ahead 25p to 910.9p.
Outside the top flight, shares in Balfour Beatty recovered from a poor start after the construction firm’s fourth profits warning in less than a year, as some analysts and traders decided that the worst must now surely be over. The stock ended the day 10p higher at 215.6p.