Shares in London have managed a small bounceback this morning, with the FTSE 100 up 56 points at 4443, a rise of almost 1.3%.
With markets across Europe also enjoying gains, the MSCI all-country world equity index – a measure of global stockmarkets - hit its highest level for 2009. It is on track to post a 9% gain for May, on top of April's 11%.
This has given the miners a helpful boost. Lonmin rose 7% and Xstrata 5.7% with the rest of the sector close behind.
Analysts said a rash of encouraging data, including news from Nationwide of a surprise rise in house prices, was helping sentiment at the end of a quiet, half-term week.
Two months of steady gains is bound to ignite hopes of a new bull market, but Philip Gillet, sales trader at IG Index, advises caution.
"This past month we have experienced bullish attitudes in the market place, but an indication of whether this will continue into June will come from the fate of the beleaguered car manufacturer General Motors. GM's board will today convene to finalise the bankruptcy plans of the car manufacturer, hopefully securing its future. However Fiat has announced that it will not be in attending todayÕs bidding for GM's European operations in Berlin and nerves are understandably getting jittery. With 5,500 Vauxhall workers in the UK, and many more in its continental operations, the failure of GM to find a suitable bidder, and the possibility of large-scale job losses, could well be a signal that the bullish attitudes experienced in May were only fleeting and that the markets are still in for stormy weather."
Severn Trent is refusing to go with the flow - the water company fell 1.6% in early trading to £11.21 despite beating analysts' expectations with pre-tax profits of £273.5m. Tullow Oil led the FTSE 100 fallers, down 2% amid lingering disappointment over its decision earlier this week to abandon a well in Uganda.
