World stocks rebounded after comments from the Federal Reserve chief boosted expectations for a US interest rate cut.
In a letter released yesterday, Federal Reserve Chairman Ben Bernanke reiterated the central bank was "prepared to act as needed" to ensure credit market problems do not hurt the economy.
This encouraged equities after volatile trading this week as investors weigh concerns about financial institutions involved in risky US home loans against optimism for solid corporate profits and growth.
Leading London shares rallied in early deals on increasing chances of a cut to US interest rates next month. The FTSE 100 index was 62.8 points higher at 6,195 at 9am.
Overnight, the Nikkei 225 Stock Average rose 140.99, or 0.9 per cent, to 16,153.82 at the close of trading in Tokyo.
Global money markets remained tight, with overnight dollar deposit rates hitting a two-week high near 5.7 per cent at one point.
Elsewhere, London Brent crude was up 0.3 per cent, supported by supply concerns. Gold was steady at $666.30 an ounce.