FTSE 100 rallies as oil climbs

The FTSE 100 has recovered slightly from last night's slump as mining and energy stocks rallied but remains under the 4,000 mark.

By 08:42 GMT, the index had risen to 3,901.24, 0.68 per cent higher than its previous close.

Fears over the economy have dragged down commodities on the index and yesterday oil prices hit a three-year low when they slipped under $50 a barrel.

However, the price of oil bounced back this morning, trading at around $50 a barrel and mining stocks rose.

Xstrata stocks were up 6.88 per cent, Kazakhmys rose 5.18 per cent and BHP Billiton jumped 4.72 per cent.

Royal Bank of Scotland shares were also up, by 4.35 per cent, after the bank's shareholders approved its £20 billion bailout plan.

Several 'defensive' stocks – those expected to do better in a slowing economy – fell, suggesting investors are feeling more confident this morning.

British American Tobacco fell 2.39 per cent, National Grid was down 2.35 per cent, Centrica stocks dipped 1.75 per cent and GlaxoSmithKline was 1.52 per cent lower.