16.45: The FTSE has risen by more than 3 per cent by the close of trading to stand at 5102.17.
The bounce back was seen across Europe with German Dax and the French Cac 40 also up 4.9 and 4.3 per cent respectively.
In the US, the Dow Jones has risen by 0.5 per cent in early trades.
16.16: The FTSE has risen by 3.4 per cent as markets continue to surge late in trading.
14.49: The FTSE is up 2 per cent to stand at 5065.23, while in Europe the German Dax and French Cac 40 are up 3.2 and 2.7 per cent.
In the US, the Dow Jones is down 0.4 per cent in early trades.
12.27: The FTSE is up by 2.3 per cent as European markets continue to rally.
The blue-chip index currently stands at 5058.16. The German Dax is up 4 per cent, while the French Cac 40 is up 3.3 per cent.
10.58: The FTSE 100 currently stands at 5005.54, a rise of 1.2 per cent.
Biggest risers in the blue-chip index include Sainsbury, Resolution Ltd and Burberry Group, all of which have risen by more than 4 per cent.
9.34: The FTSE 100 is up 1.58 per cent in early trades to stand at 5022.54.
European markets have also bounced with the German Dax up 1.4 per cent and the French Cac 40 up 2 per cent.
8.44: The FTSE 100 has bounced back above 5,000 in early trades.
The blue-chip index is up almost 2 per cent to stand at 5034.62, with Barclays the biggest mover having seen its share price rise by more than 5 per cent.
European markets have also bounced with German Dax and the French Cac 40 up 1.8 and 2.3 per cent respectively.
The bounce comes after a mixed news for markets overnight. In the US, the Dow Jones rebounded from a 1.8 per cent loss to close up 2.3 per cent. The move prevented the US closing the day in bear market territory. Banks led the bounce with the S&P financials index rising 4.1 per cent.
In Asia, the Nikkei 225 ended the day down 0.86 per cent, while in Hong Kong, the Hang Seng fell 3.4 per cent.
Meanwhile, Moody’s has downgraded the Italian government’s credit rating from Aa2 to A2 with a negative outlook.
The ratings agency blamed a “material increase in long-term funding risks for the euro area”, due to lost confidence in eurozone government debts.