Britain's leading shares reversed earlier losses of over 4 per cent today as market talk of rate cuts from central banks offered respite from worries over the US economy.
At 11.31am, the FTSE 100 was up 6.6 points, or 0.1 per cent, at 5,584.8, having earlier fallen to 5,338.7.
Today's choppy UK trade follows a 5.5 per cent drop yesterday, the index's largest daily loss since September 11th, 2001, that wiped nearly £77 billion off the value of the index's constituent stocks.
Index futures for the S&P 500 also trimmed losses but remained steeply lower, down 4.3 per cent, as US investors prepared to resume trading after Monday's Martin Luther King Day holiday.
"It's rumour central," said a trader at TradIndex. "We've heard of a 75 basis point cut in the States (and) a co-ordinated cut by the Bank of England, Federal Reserve and the European Central Bank," he added.
"It's crazy that these markets all opened down 250-300 points and within an hour they're in positive territory . . . rate cuts are the only thing that are going to kick this market back up."
The FTSE 100 has now shed over 13 per cent so far in 2008. The pan-European FTSEurofirst index is up 0.1 per cent this session.
UK property stocks were among the notable gainers, thanks to the talk of interest rate cuts.
Banks and financials were also boosted by hopes on borrowing cost cuts, with HBOS up 5 per cent, Royal Bank of Scotland up 3.5 per cent and Schroders adding 6.7 per cent.