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Markets rally after crisis talks Markets rally after crisis talks
(40 minutes later)
Most Asian markets have reacted positively to efforts by world leaders to end the recent financial turmoil.Most Asian markets have reacted positively to efforts by world leaders to end the recent financial turmoil.
Shares in Australia, Hong Kong, South Korea, Singapore and India were up in morning trading but the main markets in Shanghai and Taiwan lost ground.Shares in Australia, Hong Kong, South Korea, Singapore and India were up in morning trading but the main markets in Shanghai and Taiwan lost ground.
EU leaders earlier said no big bank would be be allowed to fail, as they agreed a plan to tackle the crisis. Major central banks also made extra funds available and said they would take "whatever measures necessary".
World governments had been racing to throw financial institutions a lifeline before the major markets re-opened.World governments had been racing to throw financial institutions a lifeline before the major markets re-opened.
Japan's stock market is closed for a public holiday.Japan's stock market is closed for a public holiday.
At the weekend, finance ministers from the main industrial nations - the G7 - approved a five-point plan to unfreeze credit markets, and a number of countries announced individual rescue packages.At the weekend, finance ministers from the main industrial nations - the G7 - approved a five-point plan to unfreeze credit markets, and a number of countries announced individual rescue packages.
Investors worriedInvestors worried
Australia's Prime Minister Kevin Rudd said his government would guarantee all bank deposits, however large, for the next three years.Australia's Prime Minister Kevin Rudd said his government would guarantee all bank deposits, however large, for the next three years.
The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage Robert ZoellickWorld Bank president Peston: Banks humbled class="" href="/1/hi/business/7665823.stm">UK banks 'forced to seek £50bn' The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage Robert ZoellickWorld Bank president Peston: Banks humbled
Correspondents say that type of move raised confidence as markets opened, and Australia's central bank on Monday pumped $2bn into the banking system to facilitate improve lending between banks.Correspondents say that type of move raised confidence as markets opened, and Australia's central bank on Monday pumped $2bn into the banking system to facilitate improve lending between banks.
By 0500 GMT, Sydney's benchmark index had risen 5%, while both Hong Kong's Hang Seng index and South Korea's Composite Stock Price Index were up by around 3%. Australia's benchmark index ended 5.6% higher and South Korea's main Kospi index finished up 3.8%.
But after a volatile morning's trading, Shanghai's main market was trading 2% lower, while Taiwan's benchmark index had lost more than 3%. Japan's markets were closed for a public holiday. By 0645 GMT, Hong Kong shares were up 3.2% and Shanghai's benchmark index moved into positive territory after falling earlier.
The BBC's Quentin Sommerville in Beijing says Asian investors remain worried that even if Europe and the US resolve their banking crises, their underlying economies are slowing down, which is bad news for Asian exports.The BBC's Quentin Sommerville in Beijing says Asian investors remain worried that even if Europe and the US resolve their banking crises, their underlying economies are slowing down, which is bad news for Asian exports.
UK cash injection
The European plan was confirmed after an emergency Paris summit of the 15 eurozone leaders on Sunday.
Under the eurozone plan, members pledged to guarantee loans between banks until the end of 2009, and said they would put money into them by buying preference shares.
Sarkozy said the eurozone plan would address all aspects of the crisis
French President Nicolas Sarkozy - whose country currently holds the rotating presidency of the EU - said the group was taking unprecedented steps.
The plan was similar to one announced by Britain last week, and although the UK is not a member of the eurozone club, British Prime Minister Gordon Brown attended parts of Sunday's talks.
Under the UK rescue package, up to £50bn of taxpayers' cash is to be injected into some of Britain's biggest banks, according to BBC business editor Robert Peston.
Royal Bank of Scotland (RBS), HBOS, Lloyds TSB and Barclays have been told by Treasury officials to seek the cash to shore up their balance sheets, and an announcement is expected before London's financial markets open later.
Governments in Germany, France, Italy and elsewhere are due to present their individual plans later, within the agreed eurozone framework, said Mr Sarkozy.
"The crisis has over the past few days entered into a phase that makes it intolerable to opt for procrastination and a go-it-alone approach," he said.
Mr Sarkozy said the plan addressed all aspects of the financial crisis, but he did not say how much it would cost.
Poor at riskPoor at risk
Analysts say sheer nervousness has been a big factor in the recent share price falls. Over the weekend, European leaders pledged to guarantee loans between banks until the end of 2009, and said they would put money into them by buying preference shares.
But European Commission president Jose Manuel Barroso - also at the talks - said the plan would end "the excessive pessimism of the markets."
The plan was welcomed by the head of the International Monetary Fund, Dominique Strauss-Kahn, who said he thought "the comprehensive response to the crisis" would be reflected in Monday's market performance.The plan was welcomed by the head of the International Monetary Fund, Dominique Strauss-Kahn, who said he thought "the comprehensive response to the crisis" would be reflected in Monday's market performance.
But even as attention focused on rescue plans for nations of the rich West, the head of the World Bank, Robert Zoellick, warned that the global crisis could hit developing countries even harder.But even as attention focused on rescue plans for nations of the rich West, the head of the World Bank, Robert Zoellick, warned that the global crisis could hit developing countries even harder.
"The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage," he said."The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage," he said.
Some developing country officials are concerned the crisis will lead to aid cuts, says the BBC's economics correspondent, Andrew Walker.Some developing country officials are concerned the crisis will lead to aid cuts, says the BBC's economics correspondent, Andrew Walker.
The IMF, which has $250bn available to lend, says there has been an incredible increase in the number of countries asking for help in the last two weeks, our correspondent adds.The IMF, which has $250bn available to lend, says there has been an incredible increase in the number of countries asking for help in the last two weeks, our correspondent adds.