The FTSE 100 index overcame recession fears to close up 46.94 points at 4087.83 after a late session boost from Wall Street.

The London market endured a volatile day's trading that at one stage left it more than 100 points - nearly 3 per cent - lower. But strong early gains in the US reversed declines to leave the FTSE ahead.

America's Dow Jones Industrial Average rose more than 2 per cent in the first few hours of trading as investors rushed to pick up bargains after Wednesday's heavy sell-off.

In London, oil prices rising off recent 16-month lows - to more than $69 a barrel - helped lend support.

Oil majors BP and Royal Dutch Shell saw strong gains, both more than 5 per cent ahead. BP shares rose 22.25p to 465p and Shell added 80p to 1499p.

It was a mixed session for financial stocks, with banks and insurers seeing varying fortunes.

Among the banks, Lloyds TSB was higher, ahead 4.5p at 172p, and HSBC also moved 9p up to 805p. But Barclays languished in the red, by 6.25p to 218.25p, as did HBOS, down 1.9p to 72.8p.

Insurers had been suffering across the board on the back of broker downgrades from HSBC and Panmure Gordon.

Legal & General bucked the trend, closing up 3.8p at 71p at the top of the risers board. However, Friends Provident and Standard Life remained under pressure, down 4.9p at 65.1p and 6p to 203.75p.

Miners were also big fallers, led by Kazakhmys down 18.75p at 239p.

British Airways fell 9.5p to 138.5p, giving up gains seen on Wednesday on bid speculation after Cathay Pacific denied rumours it was to bid for the group.

Winners: L&G up 3.8p at 71p, Shell ahead 80p at 1499p, Reckitt Benckiser up 128p at 2557p and BP up 22.25p at 465p.

Losers: Fresnillo down 21.6p at 115p, Old Mutual off 4.3p at 46.2p, Kazakhmys down 18.75p at 239p and Friends Provident down 4.9p at 65.1p.

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