FTSE 100 enjoys biggest weekly gain since eurozone debt crisis of 2011

The FTSE 100 has recorded its biggest weekly gain in almost four years, since the height of the eurozone debt crisis.

Britain’s benchmark index recorded a weekly gain of 286.18 points, or 4.67pc, to close at 6,416.16 - having emerged from a severe summer sell-off that ended last week with its worst quarterly performance in four years.

The blue chip index sunk by as much as 17pc on August 24, Black Monday, since hitting a high of 7,104 in April, amid fears China-led malaise would trigger a global recession. However, it has since recouped some of its losses, and is currently down by 10pc since its April peak.

This week’s performance is the FTSE's best since it recorded a weekly rise of 7.5pc on December 2 2011, when the eurozone region was in the depths of a debt saga with the IMF on the brink of intervening.

Yesterday, analysts credited central banks for adding “fuel to the flame”, which prompted the latest rally.

“A mix of European Central Bank easing, a frightened Federal Reserve and a bearish Bank of England helped this recent rally tick along nicely,” said Joshua Mahony, of IG Group.

The spike in oil prices has benefited the mining-heavy index, with sector-related stocks dominating the FTSE leaderboard, after Brent crude hit an intraday high of $54.05 per barrel on Friday.

Mr Mahony cautioned: “For now the relationship between oil prices and indices is certainly a positive one given the impact it is having upon sector-specific firms.”

“However, higher crude prices will no doubt soon raise inflation expectations, which coupled with strong wage growth could nudge central bankers to allay fears over disinflation.”

Glencore was among the biggest FTSE gainers after announcing it would cut 500,000 tonnes of zinc production, or around 4pc of global supply, in its latest attempt to overcome the weakness in commodity prices. Shares leapt 7pc to 129.1p, as the news triggered a rally in zinc prices.

Anglo American added 7.2pc to 726.5p, BHP Billiton was changing hands at £11.94 - up 4.3pc, and Rio Tinto rose 3.2pc to £25.99.

Meanwhile, the rebound in commodity prices also lifted the world’s major stock markets, as investors digested the dovish message from Thursday’s US Fed FOMC minutes as a positive.

European shares touched a one-month high, making their biggest weekly gain in ten months. The CAC in Paris closed 0.5pc higher, while the German DAX rose 1pc and the Spanish IBEX advanced 1.3pc.

On Wall Street, the Dow Jones Industrial Average rose 0.04pc, which the S&P 500, which was on track for its best week this year, slipped 0.1pc, and the Nasdaq opened 0.2pc higher also.

Overnight, Asian stocks rose for the same reasons, with the Shanghai Composite Index advancing 1.32pc and the Nikkei 1.6pc higher.