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The FTSE 100 ended the day up 5.41 per cent, boosted by comments made in the US by Federal Reserve chairman Ben Bernanke.

Mr Bernanke suggested to Congress that another interest rate rise could be on the cards – after the half a point cut earlier in the month.

As a result, on what was a positive day, the FTSE 100 closed up 219.66 points to 4,282.67.

Royal Bank of Scotland led the gains with a 23.18 per cent rise, while software developer Autonomy Corp was up 15.87 per cent.

Prudential gained 14.35 per cent, while Rio Tinto was up 13.11 per cent and John Wood Group rose 11.29 per cent.

Land and insurance saw the lion's shares of falls today.

Royal & Sun Alliance fell 3.08 per cent and Admiral dropped 2.41 per cent.

Hammerson and Liberty International fell 2.82 per cent and 2.41 per cent respectively, while Cable & Wireless slid 2.32 per cent.

In the US, the Dow Jones has also started positively up 2.29 per cent at 12:19 EDT (17:19 BST).

Tim Hughes, head of sales trading at IG Index, said: "Today has felt like a normal day – something we have not experienced for some time in global stock markets. Banks helped lift the FTSE and also some strength from some of the resource stocks did not do any harm, with a bounce back in commodities providing momentum.

"It was only last Thursday that the FTSE 100 slipped to fresh five-year lows but what has been encouraging is that US markets last week held above the lows seen on October 10th – similar strength was seen in the Japanese market.

"The UK index is still a good 15 per cent down on the month so far but maybe we have seen the worst of the falls for now."

However, he warned there may well be some more volatility on the way but it looks like traders are back to focussing on company fundamentals and earnings news, "rather than rushing to throw the baby out with the bath water in the panic to sell".