* FTSE up 1.8 percent, rebounding after sharp falls
* FTSE All Share near 200-day moving average, RSI oversold
* Energy stocks rise, Credit Suisse upbeat on oils
By Simon Falush
LONDON, March 17 (Reuters) - Commodity stocks powered a bounce in Britain's top shares by close on Thursday, as heavy selling this week made equities look attractive from a technical perspective, with volatility set to persist.
The FTSE 100 index closed 97.88 points or 1.8 percent, higher at 5,696.11.
It had fallen in each of the previous six sessions and the index is still down 4.3 percent this month, with political unrest and violence across the Arab World and Japan's nuclear crisis keeping investors fearful.
"Volatility is horrendous," said Neil Tong, head of UK equities at the 800 million pound ($1.29 billion) Alliance Trust. "There are a lot of unknowns, risks have gone up, the investment backdrop has deteriorated further and there are headwinds ahead in terms of oil and gas prices."
Energy stocks were strong gainers, benefiting from strength in the oil price, with Royal Dutch Shell up 2.4 percent.
Credit Suisse raised its estimates and target prices across the global sector based on strong crude price forecasts.
Oil rose by around $3 as unrest in the Gulf and Libya heightened supply disruption worry and investors weighed the impact on energy demand from quake-hit Japan.
The FTSE 100 has had over 50 billion pounds ($80.61 billion) wiped off its value in the slide since Japan suffered a devastating earthquake on Friday, which left the index looking oversold on a technical basis.
The index ended below its 200 day moving average around 5,611 on Wednesday and traders said other technical indicators pointed to the FTSE 100 looking cheap too.
"The FTSE at the moment is ridiculously oversold. RSIs (relative strength index) are running very low, signalling an oversold situation," a London-based trader said.
Miners, seen as benefiting once Japan begins to rebuild, advanced against a backdrop of firmer metals prices. BHP Billiton rose 3.1 percent.
Elsewhere, Vodafone climbed 2.6 percent, boosted by an upgrade to "neutral" by Evolution after an investor day.
Meanwhile, on the downside, Insurer Legal & General fell 1 percent to 110 pence after results which came in slightly below forecasts, against a 1.5 percent rise for the European insurance sector.
MAN Group was top of a short list of blue-chip losers, down 2.1 percent on high volumes. Its latest published figures showed its key AHL fund shed 4 percent on March 15. (Additional reporting by David Brett; Editing by Jon Loades-Carter)