The FTSE 100 index has surged more than 100 points in afternoon trade as a Wall Street rally gave fresh momentum to strong banking and telecom shares and investors shook off recent accounting worries.
The blue-chip index jumped 110.0 points or 2.46 per cent to 4,581.2 in afternoon trading, bringing gains in the last two days to 4.3 per cent since the FTSE closed at a five-year low on Wednesday. The Dow Jones industrial average rose 2.6 per cent.
But there were doubts among market watchers about the sustainability of the rally.
"Most bears are covering their short positions and I don't think we've got any real genuine buyers at this stage. That being the case there's going to be a cap on how high we can go in this current rally," said Justin Sandler, analyst at stockbrokers Eden Group.
Mobile phone giant Vodafone jumped 8.5 per cent as it recovered after a recent beating and warmed to positive news on camera phones and advanced handsets in Japan, while beaten down insurers featured Prudential, up 9.2 per cent.
The heavily-weighted banking sector, which was one of the hardest hit earlier in the week, contributed 29 points to the main index. Royal Bank of Scotland climbed 4.3 per cent, added 3.3 per cent and Abbey National jumped 6.3 per cent.