The FTSE 100 index continued its rally yesterday and finally regained all the ground lost since the terrorist attacks on September 11th.

A disappointing close from Wall Street on Thursday ensured that the UK market started the day on the back foot, with Footsie hitting a session low of 4,962.1 in the first hour.

But a solid rally took the index above 5,000, carrying it to 5,082.9 by lunch time before the release of key US data.

Figures on US employment showed that non-farm payrolls declined by 199,000 in September - rather more than the market had been expecting. The figures did not show the full impact of September 11th's terrorist attacks.

Sentiment was also adversely affected by a profit warning from Sun Microsystems and an overnight sales warning from Advanced Micro Devices.

Wall Street opened in calm fashion, but the Dow Jones Industrial Average lost ground as the session progressed, recording a triple digit loss after about an hour of trading.

It then trimmed losses in the second hour.

The net effect was to take some of the shine off Footsie's morning rally. But the blue-chip benchmark still closed 19.8 higher at 5,036.0.

At the close of after-hours trading, the December futures contract on the FTSE 100 was 5,067. Fair value on the December contract was estimated at 32.76 points above cash.

All the main indices were higher yesterday, with the FTSE 250 up 42.6 at 5,235.7, the SmallCap 5.6 at 2,193.2 and the Techmark 100 2.28 at 1,222.43.

Over the week, the FTSE 100 was up 2.7 per cent, the 250 was 2.3 per cent higher, the SmallCap rose 1 per cent and the Techmark 100 gained 6 per cent.

Some of the market's "walking wounded" rebounded yesterday, with Marconi surging on hopes of disposals and Regus jumping after further share purchases by the chief executive.

Media stocks also gained ground after their recent weakness. But there was a reminder of the fragility of some parts of the corporate sector when Atlantic Telecom called in the administrators.