Shares in the FTSE 100 saw a tumultuous but mostly positive morning after news of an alternative to the $700bn bail-out emerged in the US.
The blue-chip index flirted with 5,000 before falling to 4,943.69 shortly before midday, a rise of 41.24 points, or 0.84%.
HBOS stocks advanced after a worrying drop late yesterday and had climbed to 131.8p, a jump of 7.68%.
Xstrata had earlier led the FTSE winners after climbing as high as £18.98 but the firm has since slipped to £18.20 after advancing 104p on Wednesday.
However, Lonmin was witnessing a major drop of around 20% to £18.30 after Xstrata said it was not interested in a takeover bid.
US shares rebounded before markets closed as new hopes were raised that the US Government will come up with some new form of financial rescue plan, with a vote to take place on Wednesday night.
The Dow Jones Industrial Average recovered some of the ground lost on Monday, adding 485.21 points (4.68%) to 10,850.66.
AIG shares soared by 0.83 (33.2%) to $3.33, Bank of America added 4.75 (15.7%) to $35 per share, Citigroup gained 2.76 (15.55%) to 20.51 and JPMorgan Chase shares rose by 5.7 (13.9%) $46.70 in a successful recovery for the financial sector.
Only a single Dow Jones share fell on Tuesday. Caterpillar dropped 0.29 (0.48%) to $59.60.
News of the renewed efforts at a bank rescue in the US helped raise shares in Tokyo, with the Nikkei 225 up 108.4 points (1%) to 11,368.26.
The largest brokerage un Japan, Nomura Holdings, added 6% on the news, while its smaller rival, Shinko Securities, saw its shares rise by 5.9%.
However, manufacturing was hit, with major motor firms reporting the worst sales in more than 30 years. Nissan shares dropped 0.1% to 696 yen.
If you would like to comment on this story, contact:
Tel: 020 7484 9805
e-mail: [email protected]
Growth driven by platform business
No preferred charging model
To 1,552 families and businesses
HL and Liberty SIPP slowest
Lifetime and annual allowances