San Francisco Frontiers - Stocks climb on recession watch; pound gains before Johnson exit

Elsewhere, oil prices climbed and the euro remained around 20-year lows versus the dollar.

"Stocks bounce as pressure points ease," noted independent markets analyst Stephen Innes.

The Federal Reserve on Wednesday stressed its readiness to continue hiking US interest rates to tackle soaring inflation.

Minutes of their last meeting made clear that officials did not plan to let up in efforts this year to try and cool prices.

Inflation stands at the highest levels since the early 1980s both in the United States and Britain, where attention Thursday was firmly on political upheaval gripping the nation.

The pound rallied against the dollar and euro, with Johnson set to resign later in the day as Conservative party leader, according to local media -- paving the way for a successor to replace him as prime minister.

Dozens of ministers have quit his scandal-hit government since Tuesday, including former finance chief Rishi Sunak.

"The pound is pushing higher, hitting session highs inching closer back up to... $1.20, a critical support level it broke below this week amid the political and economic uncertainty," said Victoria Scholar, head of investment at Interactive Investor.

"The currency market is relieved that Johnson is finally resigning, removing some of the political uncertainty that was priced into the pound and paving the way for a new prime minister," she added.

The euro meanwhile remained under $1.02 -- a level it slumped under this week on its way to hitting a 20-year low.

The European single currency is being hammered by growing fears of a recession for the eurozone and the likelihood of more aggressive US interest-rate hikes.

- Key figures at around 1115 GMT -

London - FTSE 100: UP 1.0 percent at 7,181.59 points

Frankfurt - DAX: UP 1.4 percent at 12,776.75

Paris - CAC 40: UP 1.3 percent at 5,990.05

EURO STOXX 50: UP 1.4 percent at 3,470.81

Tokyo - Nikkei 225: UP 1.5 percent at 26,490.53 (close)

Hong Kong - Hang Seng Index: DOWN UP 0.3 percent at 21,643.58 (close)

Shanghai - Composite: UP 0.3 percent at 3,364.40 (close)

New York - Dow: UP 0.2 percent at 31,037.68 (close)

Pound/dollar: UP at $1.1978 from $1.1921 Wednesday

Euro/pound: DOWN at 85.05 pence from 85.43 pence

Euro/dollar: UP at $1.0189 from $1.0186

Dollar/yen: DOWN at 135.83 yen from 135.93 yen

Brent North Sea crude: UP 0.8 percent at $101.45 per barrel

West Texas Intermediate: UP 0.7 percent at $99.26 per barrel

G.Collins--SFF