LONDON'S leading companies continued to drive a stock market recovery today after better economic news from the US lifted global exchanges.

The FTSE 100 Index gained almost 100 points in early trading - taking the benchmark index back above the 5,901.7 level at which it began a week of turmoil.

Wall Street's Dow Jones Industrial Average made gains after better than expected US jobs data and approval of a 150 billion US dollar (£76 billion) tax break package to spur the world's largest economy. The optimism spread to Asian exchanges, with gains in Hong Kong and Tokyo.

In London, the Footsie stood 1.4% higher at 5955.6, adding to yesterday's 4.8% gain as more positive sentiment lifted the market.

Martin Slaney, head of derivatives at GFT Global Markets, said: "After an undeniably extraordinary week for the markets, we face the real possibility of finishing up on the week. You would have got good odds for that on Monday."

Confidence

Speculation over plans to prop up US bond insurers or "monolines" - companies which guarantee financial instruments like the mortgage-backed bonds behind the summer credit crunch - to avert another wave of write-downs have also lifted market confidence.

And yesterday's shock revelation of £3.7 billion in losses from French bank Societe Generale - incurred when unravelling rogue trader Jerome Kerviel's disastrous trades when markets collapsed on Monday - led to talk that the company might have exacerbated the crash at the beginning of the week.

Mr Slaney said: "After taking a step back from the emotions, the markets are finding positives in the combination of the rescue package, good jobs figures, lower US rates and the likelihood that much of the apparent fear which started the rout on Monday was actually SocGen unwinding trades."

Investors have endured a week of wild swings, with US recession fears sending world markets tumbling on Monday, wiping £77 billion off the Footsie.

The US Federal Reserve's dramatic interest rate cut on Tuesday triggered a recovery in London, before economic doubts returned on Wednesday to trigger more losses.

Despite the recovery yesterday and today, the Footsie is almost 8% below its opening point for 2008, and about 11% off seven-year highs achieved last June before the financial turmoil erupted.

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