A solid start to trading in New York helped kick-start a lethargic London market which ended a volatile week on a firm note.

A two-day burst of buying had seen the FTSE 100 index recover the losses sustained in Tuesday's sell-off when it fell below 6,000.

Dealers were accordingly far from surprised when investors decided on profit-taking yesterday, a move which left the index drifting lower for much of the morning.

That all changed when the Dow Jones Industrial Average started trading in positive territory. Wall Street's strength reflected the very positive investor response to news that the rise in US producer prices in July was below market expectations.

The data prompted a feeling that the expected rise in US interest rates later this month would be no more than 25 basis points.

Dealers in London banished the sellers to the sidelines and the index moved sharply ahead with banks again the big buys of the day. Telecoms stocks were also pushed higher. Dealers attributed some of the strength in banks and telecoms to investors looking to close short positions.

Turnover remained healthy and it reached 1.088 billion shares by the 6 p.m. count.