FTSE 100 closes 2.3% up after Tesco shares surge
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(Close): Tesco shares led London's main index higher on Thursday, with the FTSE 100 ending up 2.34% at 6,569.96.
Expectations that the European Central Bank may soon start a eurozone stimulus programme also boosted markets.
"This is a positive statement in many respects," said HSBC analyst David McCarthy.
"It shows sales momentum is turning, that Dave Lewis will make bold decisions on all areas of the business, that the balance sheet is being strengthened, that management has been strengthened and that there are no sacred cows with the closure of the Cheshunt head office," he said.
Outside the top flight, shares in Halfords fell 8.48% after Tesco announced the bike chain's boss would become its new UK chief executive. Matt Davies has a reputation for successfully turning companies around.
Globally, stock markets and the dollar were encouraged by comments from the Federal Reserve on Wednesday.
Officials from the central bank said a rate rise before April was "unlikely".