The FTSE slid into negative territory in afternoon trading following news of a record month-on-month drop in house prices.
The FTSE advanced almost 1% in late afternoon trading as investors shrugged off concerns relating to Ireland's credit rating downgrade and disappointing US economic data.
The FTSE rose 0.70% this morning after the Dow Jones closed last night 1.8% higher.
Global markets have rallied on the back of Japan's cut in interest rates, with the FTSE and Dow both up over one percentage point.
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London's leading share index is up nearly 1% today despite concerns over the European debt situation.
London entered the final quarter of 2010 in positive mood with sentiment lifted by hints from incoming BP boss Bob Dudley the group is ready to restore the dividend payments suspended during the Gulf of Mexico crisis.
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The UK index of 100 leading shares was up in early trading, lifted by rises in all the major global markets.
European markets have fallen sharply this morning with the FTSE 100 down 1.1% or 61.8 points at 5,511.63.