UK and European markets ended the week on a positive note as a rally in banking stocks helped equities to recover from the decline of the previous session.

London's FTSE 100 closed up 1.71% to 6,139.79, recovering from Thursday's (10 March) two-week low, while its European counterparts fared even better. Germany's Dax and France's CAC 40 gained 3.51% and 3.27% respectively, while the Pan European Stoxx 600 closed 2.62% higher.

On Thursday, European markets turned sharply south after European Central Bank President Mario Draghi admitted he saw no reason for future rate cuts. Draghi's comments seemed to offset news that of expanded economic stimulus by the ECB but investors' sentiment turned positive again on 11 March.

"Investors seem more willing to give Mario Draghi the benefit of the doubt," said Chris Beauchamp, senior market analyst at IG. "Overall it looks like the ECB has been given a vote of confidence, even if it took 24 hours for the result to come through."

Financials lead the way

Banks and insurance groups led the FTSE 100 higher, with St James's Place, Hargreaves Lansdown and RSA Insurance among the best performers on London's blue-chip index. Aviva extended the previous session's gains and was the top riser on the FTSE 100 after analysts at UBS lifted their target price on the stock.

At the other end of the scale, Old Mutual was among the worst performers of the session, after revealing it plans to split itself up into four separate businesses. The company will divide into Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank Group and OM Asset Management and expects the division to be completed by 2018.

Among FTSE 250 stocks, Marshalls was the standout winner of the day as shares surged over 10% after the landscape products group posted a 57% year-on-year rise in annual pre-tax profit. However, there was negative for Acacia Mining, which fell after UBS downgraded the stock to 'neutral' from 'buy' on the back of share price strength.

Elsewhere, oil prices gained ground after the previous session's losses. Brent crude edged 0.55% higher to $40.27 (£27.98, €36.09) a barrel, while West Texas Intermediate rose 1.56% to $38.44 a barrel.

FTSE 100 - Top 5 risers

Aviva +6.35%
St James's Place +4.75%
Hargreaves Lansdown +4.43%
RSA Insurance Group +4.37%
CRH +4.36%

FTSE 100 - Top 5 fallers

Marks & Spencer Group -2.11%
Old Mutual -1.78%
Randgold Resources Ltd. -0.55%
Shire Plc -0.18%
Schroders -0.04%

FTSE 250 - Top 5 risers

Marshalls +11.11%
Vedanta Resources +6.12%
IP Group +6.07%
Crest Nicholson Holdings +4.67%
Weir Group +4.59%

FTSE 250 - Top 5 fallers

Ted Baker -2.65%
Restaurant Group -2.63%
Acacia Mining -2.50%
OneSavings Bank -2.38%
PayPoint -2.11%