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Blue-chip shares in London edged higher today as investors concerned the bull run may be over held their nerve.
The FTSE 100 index was up 35 to 4680, having tumbled nearly 70 points yesterday amid a worldwide sell-off of shares.
“After yesterday's sharp drop, an element of calm has returned to the stock market today with the Footsie nudging back up towards the 4700 mark,” said Anthony Grech, a market strategist at IG Index. “UK inflation data has not dented the recovery.”
The Dow Jones Industrial Average looked set to open higher in New York after shedding 186.06 points to 9135.34 last night.
However, there was no recovery in Asia this morning, where stock markets continued to fall on fears that the global economic recovery has stalled. Monday's slump in London was the worst since early July and triggered concerns in the City that the five-month share price rally was over.
Before the sell-off, the Footsie had surged from a low of 3512 in March to a 10-month high above 4750 last week.
City commentator David Buik, of BGC Partners, said it was too early to say the bull run was over.
“When the markets have experienced a pullback since the rally started in early March, there has always been a slew of investors ready to accommodate bargains,” he said.
“There is a serious amount of money waiting to the wings to be invested, when the time is perceived to be correct.”
Traders said the true test of the stock market will come in September once the summer holidays are over.
