Footsie up over 40 points

Investors breathed a sigh of relief today as markets held firm after economic fears drove global stocks sharply lower on Monday.

The slump yesterday saw London fall 1.5% alongside a hefty decline on Wall Street, putting a dent in gains that have seen markets recover to levels not seen since the onset of financial crisis.

The FTSE 100 Index recovered some of the lost ground today – up 40.3 points at 4685.3 by mid-morning – after Asian markets steadied and Wall Street limited losses towards the end of its session last night.

Miners drove the recovery, with Xstrata leading the way after a gain of 40.5p to 782.5p. Rio Tinto was 77p higher at 2322.5p after moving to reduce debt with a deal to sell the bulk of its Alcan Packaging business for £1.2bn (€1.4bn).

Other significant rises were achieved by HSBC, up 16.5p to 654.5p following an upgrade from Goldman Sachs, while Lloyds Banking Group added 1.72p to 96.72p.

British Land also did its best to help restore confidence after reporting a smaller than expected fall in the value of its property portfolio. Shares, which have been inflated recently by takeover speculation, opened 1% higher but were later down 9.7p at 486.7p on fears the recession will squeeze rental income.

Land Securities also gave back recent gains with a decline of 13.5p to 596.5p.

Meanwhile, car dealership Pendragon fell 1.6p to 43.5p after it revealed a fall in first-half profits but said demand was improving in the used and new car markets.