THE London market broke its losing streak to close sharply higher after investors took their lead from a better performance on Wall Street.

By the close of trading the FTSE 100 Index was up 188.8 points at 3965.9, reversing yesterday's slide and beginning to bounce back from four straight sessions of falls.

Poor sentiment, bad corporate earnings in the US and accounting fears have all taken their toll on markets this week, causing sharp falls.

Yesterday the market slumped to its lowest level since August 2 1996, wiping a total of £124 billion from the value of the Footsie over the four days.

However today's rise - which came on the back of a surge in US stocks on Wednesday night and continued good performance today - put £45 billion back on share values.

Wall Street defied traders' expectations to make good gains this afternoon, and by the time London closed the Dow Jones was up more than 100 points.

Among the gainers in London today were insurers, which put back some of their recent losses. Aviva was up 11 per cent at 388p, Prudential rose 35 to 450p, and Royal & Sun Alliance was up 6p to 155p.

Telecoms also soared ahead, with Vodafone rising by eight per cent while Cable & Wireless picked up nine per cent to reach 166p.

Smaller rival Orange, majority owned by France Telecom, jumped 21p at 318p.

The nine per cent hike came as Orange said it had boosted its market leading position by adding 415,000 new UK customers in the first six months of the year.

That meant the number of active users reached 12.8 million by the end of June.

But blue-chip telecom giant BT slid 12p to 199p as the City showed its disappointment with below-target first-quarter sales growth of two per cent.

But among smaller stocks, more than half of the Big Food Group's market value was wiped out after it warned falling sales would push its Iceland frozen food stores into the red for the half year.

The biggest Footsie risers were Aviva up 39 at 388p, Tesco up 20 at 210p, HBOS up 56p at 615p, and Morrison's Supermarkets up 17 at 193. Fallers were BT Group down 12p at 199p, International Power down 4 at 118, Hanson down 10 at 363p, and British Airways down 2 at 138p.