MARKETS endured further turmoil as the FTSE 100 Index tumbled heavily before recovering to finish little changed from the start of the session.
The top-flight had shed nearly 140 points adding to Wednesday's 181 point slide - the worst one-day fall for 16 months - but closed just 15.7 points off at 6195.9.
It was a roller-coaster ride for blue-chip shares as they initially bounced back with a 70-point gain before the advance faded on continuing nervousness about the shape of the global economy.
The sharp fall in the previous session, which wiped £46 billion off the FTSE 100's value, appeared to have been precipitated by weak US economic data and uncertainty over bailed-out Greece where an anti-austerity party has taken the lead in polls.
It has sparked a sell-off in the country's stocks and bonds but European officials tried to steady nerves today vowing to help the Athens government to keep financing itself, while the European Central Bank offered more cheap credit for Greece's banks.
The fears over Greece build on growing anxiety in recent weeks that the eurozone could fall back into recession and have led the FTSE 100 to tumble from near all-time highs of more than 6900 points at the start of September.
Elsewhere there was a mixed bag of economic data with the US reporting unemployment claims falling to their lowest level in 14 years and a rise in factory production but a fall in an index of home builders' confidence.
In European markets, France's Cac 40 pared back sharp gains to finish in the red while Germany's Dax turned around its fortunes to end slightly ahead.
On currency exchanges, the pound recovered some of its poise after recent losses, adding a cent against the greenback to just under 1.61 US dollars as well as climbing against the single currency at just over 1.25 euros.
In London, banking stocks were shaken by the market uncertainty as Royal Bank of Scotland declined 4.5p to 337.7p, Barclays dropped 4.3p to 207.9p and Lloyds Banking Group fell 1.2p to 72.3p.
Drugs company Shire was again the biggest faller in the top flight after the board of US firm AbbVie confirmed it was no longer interested in a takeover.
Shire stock slumped 22 per cent on Wednesday and was down by another seven per cent or 294p to 3718p.
AstraZeneca, which has been a target of Viagra maker Pfizer, fell 39.5 to 4225p.
Tesco shares were down another two per cent - off 2.9p to 172p - after it emerged billionaire investor Warren Buffett's Berkshire Hathaway firm had reduced its stake in the troubled retailer to under three per cent.
The biggest risers on the FTSE 100 Index were International Airlines Group up 14.9p to 343p, Bunzl up 65p to 1584p and GKN up 12p to 299.6p.
The biggest fallers were Shire down 294p to 3718p, Aviva down 10.6p to 476.1p and Tullow Oil down 10.3p to 483.9p.
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