Footsie rises sharply in early trading

The FTSE 100 Index is up 85.9 at 4626.5 after an hour's trading.

The index rose by as much as 120 in the opening minutes before settling back.

The momentum is being driven by a late rally on Wall Street, where the Dow Jones Industrial Average gained 1.6% following upbeat economic news and the tech-laden Nasdaq was up more than 2%.

But market watchers in London say today's rise in the Footsie does not signal a revival in confidence.

They suggest traders are attempting to "dress up" books prior to the end of the half-year.

Insurers are leading the rally as the sector continues to adjust to the implications of the WorldCom scandal in the US.

Prudential is up 35½p to 595½p; CGNU has gained 30½p to 522p; Legal & General is up 6p to 131½p; and Royal & Sun Alliance has picked up 10½p to reach 248¾p.

The telecoms sector is also looking brighter, with Vodafone up 2p at 90½p; BT Group ahead 3p at 245p; and mmO2 ¼p stronger at 42½p.

Only six Footsie 100 stocks are on the way down, and these include Rolls-Royce - off 1½p at 160½p.

In a quiet session for corporate news, catering giant Compass is up 11¼p to 391¼p after announcing plans to sell its Little Chef and Travelodge businesses.