The City's leading share index rallied more than 5% on Friday to close above the 4000 barrier after another week of heightened volatility.
More than £48 billion was added to the value of UK blue chips in the rebound, which helped the FTSE 100 Index recover some of the ground lost in devastating falls seen earlier this week.
The Footsie shrugged off a raft of profit warnings and news of more woes for the US housing market to close up 201.6 points at 4063.
Friday's gains helped it finish the week up more than 100 points, although stocks endured rollercoaster trading along the way.
US shares remained under pressure after data revealed that home construction fell by a more-than-expected 6% last month - the lowest pace since early 1991. But the Dow Jones Industrial Average also showed signs of resilient trading, as an early session fall of nearly 1% later gave way to tentative gains.
Among the big winners in London were oil company shares after production cartel Opec prompted speculation it may act to halt a price fall by bringing forward the date of its important December meeting. BP and rival Royal Dutch Shell were both 9% higher.
On Thursday, the Footsie slumped more than 5%, following a fall of more than 7% the day before on recession fears.
The week started off with a gain of more than 8% as details of the UK Government's banking rescue package was unveiled.
David Jones, chief market strategist at IG Index, warned there could be more "hair-raising" swings to come.
"Before we get carried away predicting the start of the next great bull market, it's important to remember that it was only Thursday when we saw the UK index at fresh five-year lows - so it would be a bit ambitious to say we are out of the woods just yet," he said.
Banks were again experiencing mixed fortunes, with Lloyds TSB up 6% but its proposed merger partner HBOS 5% lower. Royal Bank of Scotland, which is set to gain £20 billion of Government funding, was 6% higher.
Retailers were showing gains despite high street bellwether John Lewis reporting a sales drop of 4.8% in the week to October 11 - the fourth successive weekly decline.
Tesco and Marks & Spencer were both up 6% as the market rallied. But there was a reminder of the fragile state of the economy after Inchcape, one of the UK's biggest car dealerships, issued a profits warning. Shares in the FTSE 250 firm slumped by more than a third as a result.
Oil prices fell below 70 dollars a barrel at one point on Thursday on concerns over weakening demand. They are less than half the 147 dollar high seen in July.
The price ticked up a couple of dollars on Friday in the wake of the Opec meeting announcement.
