New York - US stocks surged on Thursday after a steep dive a day earlier amid ongoing fears of a global recession.

The blue-chip Dow Jones Industrial Average gained 401.35 points, or 4.68 per cent, to 8,979.26 in a late rally.

The broader Standard & Poor's 500 Index picked up 38.59 points, or 4.25 per cent, to 946.43. The technology heavy Nasdaq Composite Index earned 89.38 points, or 5.49 per cent, closing at 1,717.71.

The gains were spurred in part by news that inflation had held steady in September, making further interest rate cuts by the Federal Reserve more likely.

London - Across-the-board falls in share prices Thursday accounted for a 5-per-cent drop in the Financial Times Share Index (Footsie) in London which closed at a 5-year-low.

Analysts said not only financial shares, but all sectors from from construction to mining and tourism, were affected by the downward trend fuelled by fears over a looming recession.

The Footsie closed down with a loss of 218.2 points at 3,861.4 points, dropping below the psychologically important 4,000 barrier.

Paris - Following big losses overnight on Wall Street and in Asia, French shares slumped on Thursday as fears of a deep recession turned investors bearish.

The Paris Bourse's CAC 40 blue-chip index ended the day off by 5.92 per cent, at 3,181, as declining issues outpaced advancing shares by 9 to 1.

Insurance giant Axa was the day's biggest loser, plunging by 12.51 per cent to 16.33 euros. Industrial group Bouygues and transport manufacturer Alstom gave up 11.1 and 10.15 per cent, respectively.