UK and European stock markets regained substantial ground after suffering their biggest intra-day falls since the US-led invasion of Iraq, following the terrorist attacks across London. Wall Street trading was subdued, but turned positive by the close while Asian markets showed little reaction to the attacks on Friday.

In Tokyo, the Nikkei 255 average fell 0.23 per cent at the start of trading on Friday but soon recovered to close the morning session at 11,653.26, up 0.54 per cent. Stocks were boosted by the yen’s continuing weakness against the dollar and strong prospects for the retail sector.