FTSE 100 recovers in morning trading

The FTSE 100 ralllied on Friday, rising more than 50 points in early trading to 5,460.8 on an overnight rise in the US markets.

The rally was prompted by an overnight rise in the US markets after the US government said it would bail out mortgage providers Freddie Mac and Fannie Mae.

The two companies do not lend directly to house buyers, but ensure mortgage lenders have enough liquidity and are central to the US mortgage market.

A report this morning from the Guardian that UK banks are joining forces to push the government and Bank of England to expand the Special Liquidity Scheme also helped boost stocks.

Thomas Cook led the risers, on news the airline has scrapped plans to buy Air Berlin following concerns from the German competition watchdog.

Shares in the holiday company rose 3.3 per cent to 189.80p by 08:35 BST.

Other risers included Ferrexpo, up 3.2 per cent, and BG Group, up 2.7 per cent.

British Airways fell the furthest this morning, down 5.1 per cent to 199.9p, amid more bad news that Terminal 5 is still losing 900 bags a day.