SHARE prices in London staged a technical rebound yesterday, ending three sessions of sharp losses as hopes grew that the US Federal Reserve may lower American interest rates when its policy-setting committee meets next week.

Market players took comfort from a recovery in rocky Asian bourses and looked ahead for a hint of a rate cut from Fed chairman Alan Greenspan when he addresses the Senate today.

By the close of business, the FTSE-100 index of leading shares had climbed 113 points to 5103.3, having at one stage been as high as 5124.1. It retreated slightly after a ragged start on Wall Street.

On Monday, the Footsie skidded below the key 5000-point level amid a sell-off across Europe and Asia.

Secondary stocks managed only modest gains with the FTSE-250 midcap index finishing 19.1 points firmer at 4572.2.

Debt instruments were hit by the strength in equities and closed weaker after six days of gains. December gilts were 0.34 off at 115.21.

In Frankfurt, German shares ended computer trade nearly 2.5% higher, but were off their peaks reached earlier in the day.

The Paris bourse was less resilient and saw most of its gains wiped out with the main CAC-40 index even making a brief foray into the red before closing up just 0.16%.

Shares in French telecommunications group Alcatel closed up 0.78%, though well off the day's highs, having broken a three-day selling binge that cut the stock's value in half.

Overnight in Asian markets, Hong Kong stocks rebounded after three days of sharp declines. The blue-chip Hang Seng index rose 2.8%.

In Tokyo, the benchmark 225-issue Nikkei Stock Average rose 1.42%. On Monday, the Nikkei hit its lowest level in 12 years.

In currency trading, Denmark's central bank said it had to intervene in the foreign exchange market to rein in the crown after it briefly surged to its firmest levels against the German mark since December 3.

Yesterday's trend marked a complete reversal from last week, when the bank repeatedly intervened heavily to support the crown, which weakened amid foreign investor selling of Danish bonds.

Late on Friday afternoon, the bank raised two key interest rates by one percentage point to 5% to defend the crown.

Currency dealers in Brazil said the Latin-American country lost another $518m (about #300m) through its foreign exchange markets and added that dollar outflows were continuing despite a recent rise in interest rates.

Meanwhile in the City, a number of UK companies announced results. Among them was supermarket chain Tesco, whose shares rose 8p to 169p after it reported an increase in profits but a slowdown in sales.

Tesco's like-for-like sales - which strip out the effects of new openings - grew by 4.3% by value, while sales by volume grew by 3%.

But in the first five weeks of the second half of the year underlying sales growth had slowed to 2.5%.

Troubled engineering group Powerscreen International shot up 16p to 83.5p after it revealed it was to sell an American business, bought two years ago, for around #27m.

Shares in Mulberry increased 3.5p to 38.5p after its retail director and company secretary Colin Ingram quit.

Tarmac, the building and construction materials group, rose 2.25p to 87.25p after it said price improvements and cost-cutting measures had helped its profits swell by 29%.

Floor tile group Tudor saw its price lifted 6p to 68.5p, a rise of nearly 10%, after it posted a massive hike in its half-year interim profits.

Shares in healthcare services group CrestaCare fell 1.5p to 30p after it blamed the opening of new nursing homes for its slight fall in profits.

After a successful debut among the heavyweights on the stock market on Monday, Scottish champions Celtic's second appearance brought it down to earth with a bump. Shares in the Glasgow club plummeted 32.5p to 300p - a fall of just under 10%.

Among other top Scottish shares, transport group Stagecoach finished up 71p to 1170p and Royal Bank of Scotland climbed 40p to 734p.