Bargain hunting sees FTSE rise 6%

London's FTSE 100 Index powered ahead today as bargain hunters returned to the market after the recent turmoil.

The Footsie was up 255.7 points to 4512.6 by lunchtime - a rise of nearly 6% - with gains for stocks across the board.

It followed a rise of more than 8% for the blue chip index yesterday in the wake of the UK's £37bn (€47.4bn) banking bail-out and similar global action to end the stock market turmoil.

Other markets across Europe posted similar gains today, including Germany's Dax which was up 5.6% and France's CAC 40 nearly 6% higher.

In London, high street Barclays was the top performing blue chip company with a rise of 18%.

Angus Rigby, chief executive of Leeds-based broker TD Waterhouse, said account openings at his firm were running at record levels over the past few days - four times higher than normal at 1,000 a day.

He said: "Our account openings are running at an all-time high. A lot of people think this is an opportunity to get back in or enter the market.

"I think we are starting to get confidence that the bottom is nigh.

"I think it will still be volatile as the mechanisms of these various packages are worked through."

Among the blue chip stocks rising today were Vodafone, up 4% after nearly 150 million shares were traded. British Airways was 12% up, following a 10% rise yesterday.

Royal Bank of Scotland, whose shares have been the biggest casualty of the recent turmoil, also rose 7%. Merger partners HBOS and Lloyds TSB remained on the back foot, both down 8%, as investors mulled over the prospects for the firms' marriage.

Energy-facing firms like BP and Royal Dutch Shell were also big winners as the oil price ticked up a few dollars. BP was 10% higher, the same as its rival.

The Share Centre has also seen the number of new accounts double over the past few days as retail investors try to take advantage of the activity.

A spokesman said: "In common with other brokers we are experiencing an increased level of activity. In terms of new accounts, activity has increased over the past two or three days."

Trading in London was given a boost by some mammoth rises in Asia and New York.

Japan's Nikkei 225 soared 14%, its biggest one day rise, while New York's Dow Jones Industrial Average soared 11%, the index's biggest daily jump since the Great Depression. The Dow was expected to make further progress today.

European governments have said they are allocating more than €1 trillion to protect the region's banks through guarantees and other emergency measures.

The US Government is following the UK's lead and taking stakes in banks to stabilise the economy. Purchasing equity shares in banks was "an essential short-term measure" to get loans moving again, President Bush said.

Richard Hunter, head of equities at broker Hargreaves Lansdown, said: "After the relief rally all eyes are going to be on the medium-term outlook and the fact that most people think that 2009 is going to be very difficult indeed.

"The third quarter earnings season is also coming up in the United States."

Justin Urquhart Stewart, a director of Seven Investment Management, warned amateur investors to expect further volatility.

"Please be careful," he said.

"These are erratic and dangerous times. Inflation is high, the global economy is slowing and the banking crisis is still around.

"If you make a profit on short-term investments, then bank it."