Scottish stocks help Footsie surge

Edinburgh-based Cairn closed up 8.2 per cent or 23.2p at 307.6p, while Glasgow's Weir jumped 123p or 7.8 per cent to end the day at 1,703p as the pair shared in the wider stock market rally.

Other Scots energy stocks overcame erratic movements in the oil price - with Brent bouncing between $105.95 and $98.74, its lowest intra-day level since February. Edinburgh-based oil and gas explorer Melrose Resources was 8 per cent or 13.5p higher at 182p and Aberdeen peer Xcite Energy gained 5.2 per cent or 6p at 123p. Wood Group, the energy services giant, was also on the move, rising 7.2 per cent or 37p to close at 554.5p.

The wider FTSE 100 index enjoyed a boost as traders awaited an announcement from the US Federal Reserve. The Footsie closed 1.9 per cent or 95.97 points higher at 5,164.92, bringing to an end four consecutive sessions of triple-digit losses.

London's stock market was boosted by a strong opening on Wall Street, which helped to give direction to an otherwise volatile session, which had seen the Footsie slump to an intra-day low of 4,791.01, the first time it had slipped below the 5,000-mark in more than a year.

Atif Latif, director of trading at Guardian Stockbrokers, said that, at 5am, analysts had been talking about a 7 per cent fall for the FTSE-100 index.

He added: "The FTSE-100 index breached the key 5,000 level to the downside and registered a 20 per cent drop since February 2010, as it entered a bear market and then, just as quick, rebounded."

Investors continued to favour safe havens, with gold continuing to hit record highs, touching $1,782.50 an ounce.

Banking shares had mixed fortunes following early falls as investors fretted about their exposure to indebted European economies and after heavy losses for counterparts in New York on Monday.

Taxpayer-backed Royal Bank of Scotland was among the Footsie's biggest fallers, down by 1p at 26.2p. It has lost one-third of its value in the past two weeks and is sitting at about half the UK government's break-even point of 51p.

Barclays and HSBC added 3.9p and 7.2p to 179.3p and 545p respectively, while Lloyds Banking Group fell 2 per cent or 0.7p at 32.1p.

In corporate news, shares in bakery chain Greggs slumped after it reported a rise in underlying half-year profits but said the second half of the year was likely to be tough. The stock fell 27.5p to 454.5p.

Meanwhile, shares in InterContinental Hotels were among the most resilient in the top flight after the Holiday Inn operator reported a 23 per cent rise in profits. It intends to increase its UK estate by a further 28 hotels from the current total of 269. IHG added 79p to 1,042p.New York-listed life sciences giant Alere increased its stake in Dundee-based medical testing kit maker Axis-Shield to 6.9 per cent from 6.4 per cent. Shares in the Scottish firm closed up 1p at 462p, above Alere's takeover bid price of 460p.