The London market has closed higher despite seeing travel firms slump as a result of the Paris terror attacks.

The FTSE 100 Index was up 28.1 points to 6146.4, led by housebuilder Taylor Wimpey as it reported a record order book.

UK and European markets had been knocked by around one per cent in the first hour of trading, but later recovered with Germany's DAX flat and France's Cac 40 down slightly.

Traders had been worried about the combined effects of the Paris attacks, China's economic slowdown, lower oil prices and the prospect of a US rate hike next month.

But CMC Markets analyst Jasper Lawler added: "It seems likely there will be more air strikes and more attacks like those seen in Paris, which has the potential to be an ongoing source of unease for markets."

The pound was slightly up against the euro at just under 1.42, after official data said eurozone inflation lifted higher than forecast to 0.1 per cent in October from zero the month before.

But this is way below the European Central Bank's (ECB) target of just below two per cent for the 19-nation bloc, and the central bank is still widely expected to announce further stimulus measures at its December policy meeting. Sterling was also slightly down against the US dollar, at just under 1.52.

Increased geopolitical risk lifted safe havens such as gold which has rebounded from near five-year lows.

This saw Randgold Resources climb 77p to 4028p and silver miner Fresnillo edge up 1p to 674p.

Travel stocks were the heaviest fallers in response to the Paris attacks.

Holiday firm TUI was the biggest faller in the top flight, down 46p to 1088p, British Airways owner International Airlines Group fell 16.5p to 576p and cruise business Carnival was 88p lower at 3383p.

Taylor Wimpey was the biggest riser in the top flight after the housebuilder hailed an "excellent summer selling season" and forecast a sharp improvement on its full-year profit margins.

It reported sales volumes for the year to date had increased 15 per cent, and its total order book now stands at £2.1 billion - £400 million higher than a year ago. Shares lifted 7.1p to 180.9p.

Elsewhere, Majestic Wine saw its profits plunge by half after its earlier acquisition of an online rival.

The warehouse wine retailer said its pre-tax profit tumbled to £4.3 million in the six months to September 28 compared to a year ago, as a result of charges from its April purchase of Naked Wines.

But analysts were impressed with the retailer's three-year turnaround plan, which includes almost doubling annual sales to £500 million.

Shares rose 12.5p to 322.5p.

The biggest risers in the FTSE 100 index were Taylor Wimpey up 7.1p at 180.9p, AstraZeneca up 164p at 4258p, Imperial Tobacco up 135p at 3589p and Rolls-Royce up 14.5p at 528p.

The biggest fallers in the FTSE 100 index were TUI down 46p at 1088p, Glencore down 3.6p at 89.5p, International Airlines Group down 16.5p at 576p and Carnival down 88p at 3383p.