Cautious gains in Europe's shares

Fears that the UK insurance industry could be dragged into the banking collapse did not stop the London stockmarket staging a strong recovery this morning.

Stockmarkets in Germany and France also opened strongly, after Japan's Nikkei finished a dramatic week with a near-3% rise.

In early afternoon trading, the FTSE 100 was up 2.3%, the Dax in Frankfurt was up 2.9% and the Cac 40 in Paris was up 2.2%.

That followed gains of 4.7% in New York and 2.8% on Tokyo's Nikkei 225 index.

It comes at the end of a week of rallies and slumps, unseen since the crash of 1987.

The FTSE was up 44.42 points, or 1.1pc, to 3905.8 in midday trading, losing ground after an earlier gain of as much as 5pc.