Market volatility seems to be a default setting at the moment, and after yesterday's declines, leading shares are heading higher again on the back of a rise in mining and banking shares.
Despite continuing fears of a double dip recession, metals prices have gained some ground with copper edging up $66 a tonne to $6,535. Reports that Xstrata has agreed to sell thermal coal to Toyko Electric Power at a 30% premium to last year's prices is also helping sentiment. So Xstrata has added 40p to 891p while Antofagasta is up 37p to 798p.
Banks are better on hopes that they will pass the European stress tests, although there are suggestions this could still not take account of all the problems facing them, sovereign debt for one. But for the moment Barclays is 8.6p better at 267.8p while Royal Bank of Scotland has risen 1.04p to 40p.
BP is 9.5p higher at 342.8p on talk it is seeking a strategic investor such as a sovereign wealth fund to fight off any takeover bids.
So overall the FTSE 100 is up 78.01 points at 4901.54, although as befits a sunny day in July, volumes are fairly light.
Utility companies are among the losers as investors dip their toes into riskier areas, with National Grid down 1.2p to 486.5p and Severn Trent 3p lower at £12.27.
Some analysts believe the market could see a recovery from this level and has fallen too far. Mike Lenhoff at Brewin Dolphin, for example, reckons a good US earnings season - which starts next week - could give the optimists some encouragement:
The sovereign debt crisis, the related problems with banks, Europe's fiscal austerity and, elsewhere, central bank normalization, have all brought the prospect of a double dip more closely into focus. It's what the correction in equity markets has been all about and they are now oversold, attractively valued and in a strong position to rebound on any good earnings news flow.
Next week, US companies start reporting on their second quarter earnings. A decent earnings season would help set to rest some of the apprehension that has weighed on equity markets and make our year-end target for the FTSE 100 of 5500 (formed before the end of last year) look like something to go for.
