The Dow Jones index of leading US stocks surged by more than 100 points or more than 1%, within 15 minutes of opening.

A great start on Wall Street helped kick-start a recovery in London

Strong US job figures helped calm fears about a sharp slowdown in the domestic economy.

Stocks have fallen around the world this week on fears that the world economy still faces a torrid time following financial turmoil in Asia, Russia and now Latin America.

US Internet and high technology stocks bounced back after a difficult few days.

UK recovery

UK shares also rose sharply in afternoon trading after a dramatic turnaround on the London market.

Earlier in the day billions of pounds were wiped off shares as investors took fright about the state of the UK economy.

However by 1445 GMT the FTSE had risen 39 points to 5605.

The surge in the US outweighed concerns that the UK economy could be heading for a recession.

European stock markets also rose.

What a difference a day makes

It is a far cry from Thursday when the US stock market slumped 2%, unsettling other markets around the world.

Brazil's troubled finances prompted the sell off in New York. Asian markets are also showing signs of nervousness, Tokyo's Nikkei index fell 57 points to 14,640 while Hong Kong closed flat at 10,052.

In Brazil, the government's economic recovery plan has run into a brick wall as its parliament rejected a key measure in the austerity budget.

The budget's implementation is also the key to an International Monetary Fund loan package to help the country stave off the threat of financial meltdown that has gripped other emerging markets.

Crucial times

Brazil is viewed as a lynch-pin for Latin America's financial health, and weakness in that region would hit US economy, and American corporate earnings, hard.

Bill Meehan, chief market analyst at Cantor Fitzgerald, said: "Brazil is counterbalancing the European rate cuts, and the US markets are really concerned about exposure, especially hedge fund exposure, to Brazil."

Investors were also unhappy at figures which revealed that the Japanese gross domestic product had shrunk over the summer.

It means the second biggest global economic power has recorded negative growth for the fourth consecutive quarter.