There was welcome relief in London as shares rebounded sharply in response to big rises in Russia and Hong Kong.

The FTSE 100 index started trading on the edge of a big technical support level and headed higher throughout the day. It belied negative pointers in the futures market late on Thursday and moved forward strongly straight away.

By early afternoon, after the Dow Jones Industrial Average had opened higher, Footsie hit a peak of 5,517.6, up 118.1. Later, it drifted lower but managed to end 55.5 higher at 5,455.0. The rise took some of the venom out of a market which had fallen 13 per cent since the peak on July 20th.

Meanwhile, the midcap FTSE 250 index rebounded 28.5 to 5,182.5 and the Small Cap 0.3 to 2,333.4.

Intrnational support was provided by a 13.7 per cent rebound from Russia's RTS index and an 8.5 per cent recovery by the Hang Seng index in Hong Kong.

The rise in Hong Kong gave a strong boost to HSBC, which is a big constituent of the index and was lifted further by merger talk and broker recommendations.

Domestically, the market was helped by a growing number of strategists arguing it was oversold.

Earlier in the week, BT Alex Brown turned more enthusiastic following a month-and-a-half of gloom. And Lehman Brothers said earnings estimates would need to fall by 20 per cent to reflect the market's current level.