UK stocks bounced today, erasing earlier losses after Kuwaiti sources said US-led forces had moved into the Kuwait-Iraq demilitarised zone.
"We've seen the Kuwait headlines. It's relief that something is moving at last," said Mr Lawrence Peterman, investment analyst at Eden stockbrokers. Investors are hoping for a quick resolution to the Iraqi crisis.
The FTSE 100 jumped as much as 0.9 per cent to 3,781.8 by 11.30 a.m. Earlier the index had fallen as low as 3,716.5 points, slipping after four days of gains.
Oil stocks BP and Shell had the biggest effect on the index, jumping more than two per cent each.
European stock markets had been quiet in early trading today as many dealers sat on the sidelines of imminent war against Iraq, mindful of the risks posed by a prolonged conflict.
The ISEQ index of shares in Dublin was down 19.16 points to 3,933.45.
The DJ Euro Stoxx 50 index of leading euro-zone shares inched up per cent to 2,162.6 points. The German DAX 30 dipped 0.6 per cent to 2,569.0 points and the French CAC 40 index ticked up 0.3 per cent to 2,803.4 points. The euro was being traded at 1.0635 dollars.