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Bush attempts to reassure markets Bush attempts to reassure markets
(9 minutes later)
US shares are expected to rise on opening after President George W Bush renewed calls for Congress to back the $700bn (£380bn) banking rescue plan.US shares are expected to rise on opening after President George W Bush renewed calls for Congress to back the $700bn (£380bn) banking rescue plan.
Although Wall Street saw sharp falls on Monday after Congress blocked the deal, investors appear hopeful a fresh plan can be agreed later this week.Although Wall Street saw sharp falls on Monday after Congress blocked the deal, investors appear hopeful a fresh plan can be agreed later this week.
Mr Bush warned that if agreement is not reached, the US economy faces "painful and lasting damage".Mr Bush warned that if agreement is not reached, the US economy faces "painful and lasting damage".
Global shares have seen volatile trading since Monday's deal failure.Global shares have seen volatile trading since Monday's deal failure.
Bank shares hit 'Urgent situation'
Following the US rejection of the rescue deal, a number of developments have hit the global financial sector on Tuesday:
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  • The UK's FTSE 100 index was up 0.3% or 14 points to 4,832 by 1300 BST, while Germany's Dax was 0.7% lower at 5,770 and France's Cac was up 0.3% to 3,957
  • Banking shares were the biggest fallers in London, as concerns grow about how the delay in securing a US rescue deal will hit the financial system
  • HBOS was down 10%, Royal Bank of Scotland was 6% lower
  • Japan's Nikkei index ended Tuesday down 4.1%, while Hong Kong's Hang Seng rose 0.8%
  • In Russia, trading was temporarily suspended on the country's two main stock markets
  • In the Republic of Ireland, the government announced that all bank deposits would be guaranteed for the next two years
  • European bank Dexia has received a state bail-out, costing the Belgian, French and Luxembourg governments a combined 6.4bn euros ($9.2bn; £5bn)
"We are in an urgent situation and the consequences will grow worse each day if we do not act," Mr Bush said at the White House.
Why did the bail-out bill fail?Q&A: US $700bn bail-out plan
"It matters little what path a bill takes to become law. What matters is that we get a law.
"We're at a critical moment in our economy."
US shares are expected to open higher after stocks rose in electronic pre-trading on the futures markets.
Following the US rejection of the rescue deal on Monday, a number of developments have hit the global financial sector on Tuesday:
  • The UK's FTSE 100 index was up 0.3% or 14 points to 4,832 by 1300 BST, while Germany's Dax was 0.7% lower at 5,770 and France's Cac was up 0.3% to 3,957
  • Banking shares were the biggest fallers in London, as concerns grow about how the delay in securing a US rescue deal will hit the financial system
  • HBOS was down 10%, Royal Bank of Scotland was 6% lower
  • Japan's Nikkei index ended Tuesday down 4.1%, while Hong Kong's Hang Seng rose 0.8%
  • In Russia, trading was temporarily suspended on the country's two main stock markets
  • In the Republic of Ireland, the government announced that all bank deposits would be guaranteed for the next two years
  • European bank Dexia has received a state bail-out, costing the Belgian, French and Luxembourg governments a combined 6.4bn euros ($9.2bn; £5bn)
Analyst Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said European investors were hopeful the US will eventually pass the bailout plan.Analyst Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said European investors were hopeful the US will eventually pass the bailout plan.
"This deal is not dead in the water and there are hopes that when Congress reconvenes it could still go through," he said."This deal is not dead in the water and there are hopes that when Congress reconvenes it could still go through," he said.
Day of turmoil
The US rescue plan, a result of tense talks over several days between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.
HAVE YOUR SAYI know we need a strong financial sector, but where is the talk of structural change that's going to prevent recurrence?Neil, California, USSend us your comments
About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats.
Congress will not meet again until Thursday - after a break for the Jewish New Year - with another vote unlikely before the weekend, the BBC's Jonathan Beale in Washington says.
The House's rejection of the bail-out plan came after a day of turmoil in the US and Europe, with Wachovia, the fourth-largest US bank, being bought by larger rival Citigroup.
Monday also saw the partial nationalisation of Benelux banking giant Fortis by three governments, and UK lender Bradford & Bingley was taken into state ownership.