FTSE bounces as investors snap up banks

London’s leading share index has rebounded from yesterday’s turbulent session, with investors finding value in depressed bank stocks.

Around £49bn was wiped from the FTSE 100 yesterday with banking and sovereign debt fears sending the market into turmoil.

However, investors have returned today after the heavy sell-off seen Monday, driving the index to gain 1.08% or 55 points at 5,157, at 10am.

Banking stocks have been snapped up after seeing heavy selling, with Royal Bank of Scotland up 3.72% or 0.81p, to 22.5p, with Lloyds also performing strongly, gaining 3.59% or 1.1p to 31.75p.

European markets have made modest gains from yesterday's slump, with the Cac up 0.67% to 3,019, and the Dax up 0.38% to 5,266.

Stock markets across Asia sold off sharply overnight as investors reacted to steep market falls in Europe where London experienced its second largest drop this year.

Japan's Nikkei 225 index fell 2% overnight, while Hong Kong's Hang Seng dropped 1.4%, following a day of woe for European markets.

Amid the turmoil, gold has spiked back near record highs, and is currently above $1,900, having jumped more than 2% yesterday.