US shares closed up more than 400 points today at the close as falling oil prices and easing credit markets helped soothe investor jitters.

A late rally lifted the Dow Jones Industrial Index by 401.35 points or 4.68 per cent to 8,979.26.

“In a couple of years we will look back at October of 2008 wishing we had bought more stocks,” said Bob Doll, global chief investment officer of equities at BlackRock, one of the world’s largest asset managers.

Oil fell more than 6 per cent to below $70 a barrel on Thursday, touching a 15-month low on rising US inventories and concerns a possible recession would slow demand further. The oil price has more than halved in the past three months.

Earlier today, UK share prices plunged in the wake of an emergency meeting called by Opec for next week to discuss oil prices.

The FTSE 100 index of top UK companies closed 5.3 per cent down at 3861.3, a loss of almost 220 points, and it now stands 40 per cent lower than it was a year ago.

Elsewhere in Europe, Germany’s DAX lost 4.9 per cent and France’s CAC shed 5.9 per cent.

Recession fears have been gripping equity markets, and fuelled by 461,000 more Americans losing their jobs last week.

While the number was below forecasts of 470,000, overall, the rate is rising at an alarming rate with 6.1 per cent of the American workforce out of work.

Industrial production data played on frayed nerves when it emerged that activity had declined by 2.8 per cent, the fastest fall since 1974.

However, the cost of living in the US remained unchanged in September, better than Wall Street had been expecting. The sharp slide in the price of oil, which has reduced utility bills, helped offset a 0.6 per cent rise over the month in food prices.

With inflation pressures easing and the unemployment rate surging, Ben Bernanke, the chairman of the US Federal Reserve is under pressure to cut interest rates again from their current levels of 1.5 per cent.

The banking crisis has pushed the world's biggest economies towards recession - a predicament which is expected to reduce demand for oil. In turn, the oil price has fallen steadily over the last few months and has eased the rate of inflation.

In the past, Mr Bernanke has been in a dilemma about cutting interest rates to boost growth because he was concerned that the move would stoke inflation.

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