The volatile FTSE 100 Index pulled itself back towards the 4000 barrier today as bargain hunters picked up shares after yesterday's fall.

By 1pm, the Footsie was up 42.10 points at 3937.60, although it had slipped back from an earlier 98-point jump.

The upturn, however, meant shares only put back less than a fifth of yesterday's 203-point loss.

Analysts said the rise came as investors hunted down bargains, buoyed by the absence of any major downbeat news in the corporate arena.

But there was little to suggest the rally could be sustained and the City was now anxiously awaiting its next lead from New York.

Traders were tentatively predicting it would open ahead.

Confidence remained fragile after more than £48 billion was wiped off the value of Britain's blue- chip shares yesterday.

During a second successive Black Monday, the Footsie fell almost five per cent to record its lowest close since September 6, 1996.

The decline was again driven by the United States after the Dow Jones Industrial Average dropped more than 300 points, rebounded, then closed down more than 230.

In London, companies which struggled during yesterday's bloodbath were recovering some lost ground.

Mobile phone giant Vodafone picked up almost three per cent, while oil giants Shell and BP gained four per cent and one per cent respectively.

Alex Scott, of Seven Investment Management, said: "There was encouraging strength early on but so often we've seen that fizzle out."

FTSE 250 retailer Debenhams slumped 13 per cent, or 43p to 286p, after it said margins had suffered in the face of tough trading conditions.

But stricken telecoms group Marconi rose almost five per cent, 0.19p to 4.19p, as it said its rescue strategy remained on track despite a further downturn in its market.