The City of London was buoyed in early morning trading by Italy's decision to cut rates by a full percentage point, reinforcing hopes of a reduction by the Bank Of England.

US dealers had to put their feet up for an hour

The chances of a drop was further increased by a CBI report that a 0.5% November cut was the only way to avoid outright recession next year.

The FTSE 100 Index of top shares continued stood up 45.8 points to 5277.3 by mid-morning.

In Frankfurt, the Xetra Dax index rose by 1.10% to 4,629.8 points and in Paris, the Cac 40 index opened 1.66% higher at 3,506.68 points.

However it was a mixed picture on other leading markets.

In Japan the Nikkei dropped 22.78 to 13820.68, however in Hong Kong the Hang Seng finished strongly up 148.14 at 9927.05.

European markets were also feeling positive

Meanwhile the Dow Jones fell for the second consecutive day amid a lack of major news to lift the market.

The index finished 20 points lower at 8432.

A computer hardware problem froze trading at the world's largest exchange and sent US financial markets into a state of suspended animation for nearly an hour.

The interruption halted all New York Stock Exchange trading from 1316 local time (1816 GMT) for 59 minutes.