The FTSE 100 index finally broke its losing streak yesterday as some better profits news prompted a strong rally on hopes that the worst, for the US at least, might be over.

A whole raft of results from the US corporate sector, including General Electric, Microsoft and Wal-Mart, either matched or beat expectations, and some companies also made hopeful statements about the rest of the year.

European markets surged in morning trading, hoping Wall Street would take heart from the results. London took part in the rally, with Footsie chalking up a triple digit gain just after 11 a.m.

The Dow and Nasdaq retained their strength until the London close, allowing the FTSE 100 to end with a 89.7 point gain at 5,481.6, compared with a day's high of 5,497.6. That was Footsie's first rise since July 2nd.

Technology stocks led the way up, just as they had suffered the most on Wednesday. Ten out of the top 14 performing stocks in the FTSE 100 were from the TMT (technology, media and telecom) sectors, including ARM, which rose 13 per cent. Five technology stocks in the FTSE 250 index Parthus, Psion, Baltimore, London Bridge and

Bookham also showed double-digit gains. Vodafone threw its weight behind the rally, rising 4 per cent.

In domestic economic news, the British Chambers of Commerce survey showed further weakness in both the manufacturing and service sectors. Mr Steve Russell, UK strategist at HSBC said: "The results from the US over the last 24 hours gives us hope we might have reached the end of the blind panic period and we are looking for a recovery on the markets over the next six months."

Turnover was boosted by programme trades, with investors switching from old to new economy stocks. Some 2.07 billion shares were traded by the 6 p.m. count.