LONDON: World stock markets and oil prices rallied Friday, building on the previous day's recovery sparked by the European Central Bank hinting at more eurozone stimulus.
Equities and crude began rebounding Thursday after the ECB said there were "no limits" to the stimulus measures it might take to boost the eurozone economy.
Sentiment was boosted further Friday by a report that said Japan's central bank was considering similar moves.
"Global stocks rebounded strongly on Friday, capping a massive two-day about turn that erased sharp declines early in the week," said market analyst Jasper Lawler at CMC Markets UK.
"The rally was aided by a surging oil price and talk of stimulus from both the European Central Bank and the Bank of Japan," he added.
The week's trading has seen volatile swings, with top European stock markets plunging by 3.5 percent Wednesday on fears over global economic weakness.
After a sell-off that has wiped several trillion dollars off global markets so far this year, the prospect that two of the world's biggest central banks were ready to finally step in gave investors something to cheer about.
On Thursday, ECB boss Mario Draghi highlighted concerns about the impact of plunging equity and oil prices on already weak inflation and pledged the bank would reconsider its monetary policy at its March policy meeting.
His comments lit a fire under European stocks and also supported a Wall Street rally on Thursday.
On Friday, Japan's respected Nikkei business daily reported that the central bank is weighing up its own plans to fend off the threat of deflation that has been exacerbated by the oil crisis.
The latest developments spread some much-needed confidence around trading floors after the worst-ever start to a year.
Tokyo led the gains, surging 5.9 percent, the best one-day performance since early September, with a weaker yen helping exporters. Hong Kong ended 2.9 percent higher and Shanghai added 1.3 percent.
European stocks finished strongly with Paris climbing 3.1 percent and the exchanges in oil-dependent Norway and Russia shooting up 4.5 percent and 9.4 percent respectively.
Wall Street also pushed higher.
"US stocks are moving solidly higher in early action for a second-straight session," said analysts at brokerage Charles Schwab.
"Rising expectations of further global monetary policy stimulus measures are supporting sentiment, along with the continued recovery in crude oil prices."
- Oil soars -
Oil prices also extended gains to climb above $31 a barrel, having soared more than four percent on Thursday on the back of Draghi's comments and a report showing US inventories rose less than expected last week.
However, the two contracts remain around 12-year lows owing to a supply glut and weak demand.
Earlier this week, WTI fell below $27 a barrel and Brent went under $28.
With oil prices rallying, energy companies saw their share prices rocket on Friday. Royal Dutch Shell jumped 5.4 percent higher and BP won 3.1 percent.
However shares in Italian oil exploration and engineering firm Saipem plunged 20 percent in Milan after the company announced a 3.5 billion capital hike would be at a 37 percent discount.
The positivity also seeped into currency markets as investors shifted out of assets considered havens such as the yen.
Russia's battered ruble meanwhile bounced back after the jump in crude oil prices, recovering ground a day after it slumped to an all-time low against the dollar.
The nation's energy-reliant economy has been pushed into recession by tumbling oil prices and Western sanctions over Ukraine.
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