London stocks jumped on Friday, bolstered by a recovery in oil prices and speculation of further stimulus measures in Europe and Japan. Oil prices rebounded, with Brent crude surging 6.1% to $31.16 per barrel.

While it’s too early to suggest oil prices have bottomed – oil is very oversold and now appears to have entered into a correction period.  Given how fierce the sell-off has been until now, it will be interesting to see just how far these rallies are allowed to run before sellers see value once again.

In a note to clients on Friday, Moody’s lowered its 2016 price estimate for both Brent and WTI crude to $33 per barrel amid an oversupplied market. For Brent, that marked a $10 per barrel reduction from the rating agency’s previous estimate, and for WTI, a $7 per barrel reduction.

European Central Bank President Mario Draghi on Thursday said that amid recent falls in oil prices Eurozone inflation would remain very low or negative in coming months. For this reason, he said the monetary authority would reconsider its monetary policy at its early March meeting when macroeconomic projections became available.

In economic data on Friday, investors shrugged off disappointing UK retail sales figures. Sales fell 1% in December from a month ago, more than the 0.1% drop that was expected by analysts. In comparison to a year ago, retail sales volumes rose 2.6% last month, missing forecasts of 3.5% growth.

In the Eurozone, Markit’s flash reading on the manufacturing purchasing mangers’ index fell to 53.5 in January from 54.3 in December. A reading above 50 signals expansion in the sector, while a level below that indicates a contraction.

Elsewhere, Japan’s Nikkei led Asian stocks higher after Prime Minister Shinzo Abe’s aide on Thursday said that “conditions for additional easing have fallen into place”. The Bank of Japan meets on 28-29 January when it is expected to increase asset purchases.

Meanwhile, billionaire investor George Soros warned at the World Economic Forum in Davos that China was already undergoing a ‘hard landing’ and that the US Federal Reserve would not raise interest rates again this year.