THE British equity market's new year hangover disappeared yesterday as global stock markets displayed their relief at Wall Street's strong recovery on Thursday.

At the close of a relatively busy session, the FT-SE 100 had clawed back over half of the previous day's 61.1 decline, finishing a net 32.1 higher at 4,089.5.

There were equally good performances from the other FT-SE indices, with the 250 finally 24.2 up on balance at 4,493.6 and the SmallCap 10.7 better at 2,189.0.

Wall Street's surprising overnight rally on Thursday saw the Dow Jones Industrial Average recoup all but five points of an earlier 95-point slide. The slide was triggered by a surprisingly strong National Association of Purchasing Management Index for December.

With gilts and other European bonds taking their lead from their US counterparts and nudging higher, London equities kicked off the session on a firm note and made encouraging progress for most of the rest of the day. Wall Street's buoyant opening and subsequent sharp gains as the US session got under way yesterday were further bullish news for London. The Dow was around 65 points higher just before the UK market closed.

Dealers were additionally heartened by the gradual increase in the level of activity in a stock market still said to be operating at something like 50 per cent capacity.

Turnover at the 6 p.m. reading came out at 519.6 million shares, marginally ahead of Thursday's 459.1 million.