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However, FTSE traders remain cautious and more market turmoil is expected during the day.
The rally does not claw back the losses made yesterday in their entirety, but offers a positive start to the day for stock market traders.
Bank share values are still in the doldrums, however, as fears of the French banking system and the country's AAA credit rating continue to reverberate around the globe.
At the close of play last night, the FTSE 100 was down three per cent - mirroring ongoing stock market turmoil in the US.
The triple digit decline was in part driven by the Bank of England's decision to downgrade the UK's gross domestic product forecast - revising its earlier forecast of 1.8 per cent to 1.4 per cent.
Speaking to the Financial Times about the current stock market turmoil, Laith Khalaf, pensions analyst for Bristol-based Hargreaves Lansdown, said that it will only really impact upon people close to retirement.
Posted by Greg Secker
