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Markets surge after crisis talks | Markets surge after crisis talks |
(40 minutes later) | |
European and Asian markets have rallied in response to efforts by world leaders to end the recent financial turmoil. | European and Asian markets have rallied in response to efforts by world leaders to end the recent financial turmoil. |
London's FTSE 100, France's Cac 40 and Germany's Dax index all jumped more than 6%, tracking earlier gains on Asian markets. | London's FTSE 100, France's Cac 40 and Germany's Dax index all jumped more than 6%, tracking earlier gains on Asian markets. |
Major central banks said they would offer financial institutions an unlimited amount of short-term dollar loans to help stem the crisis. | Major central banks said they would offer financial institutions an unlimited amount of short-term dollar loans to help stem the crisis. |
EU leaders said on Sunday no big bank would be be allowed to fail. | EU leaders said on Sunday no big bank would be be allowed to fail. |
The hope in the markets is that political leaders have finally grasped the nettle Keith Bowman, Hargreaves Lansdown Stockbrokers. | |
UK shares got a boost after the government said it would inject up to £37bn of taxpayer cash into Royal Bank of Scotland (RBS), Lloyds TSB and HBOS. | UK shares got a boost after the government said it would inject up to £37bn of taxpayer cash into Royal Bank of Scotland (RBS), Lloyds TSB and HBOS. |
The FTSE 100 index was up 268.56 points, or 6.83%, at 4,200.62 points, with gains led by banking stocks. | |
"Today marks another momentous day in both UK and global financial history," said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers. | |
"The hope in the markets is that political leaders have finally 'grasped the nettle', with substantial and coherent rescue plans now being formulated and rolled into place. | |
FTSE 100 INDEX: 13 October 2008*All Times GMT | |
European action | |
Governments in Germany, France and Italy are expected to unveil their individual plans this week, within an agreed eurozone framework, French President Nicholas Sarkozy said on Sunday. | |
Reports said that Germany's financial rescue plan will total about 400bn euros ($545bn;£318bn), with Chancellor Angela Merkel due to make a statement later. | |
Nicolas Sarkozy announces the rescue plan | |
Trading on the Russian stock market resumed after regulators halted operations last week because of unprecedented volatility. | |
The rouble-denominated MICEX - where most of Russia's trading takes place - rose 3.9% to 727.7. | |
The US Federal Reserve, the European Central Bank, the Swiss National Bank and the Bank of England unveiled further measures to thaw frozen credit markets. | |
They said they would provide unlimited dollar funds to financial institutions via money market auctions. | |
"Central banks will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity," the ECB said in its statement. | |
Lifelines | Lifelines |
Governments around the world had been racing to throw financial institutions a lifeline before the major markets re-opened. | Governments around the world had been racing to throw financial institutions a lifeline before the major markets re-opened. |
At the weekend, finance ministers from the main industrialised 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 industrialised nations - the G7 - approved a five-point plan to unfreeze credit markets, and a number of countries announced individual rescue packages. |
A European plan was confirmed after an emergency Paris summit of the 15 eurozone leaders. | |
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. | 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. |
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 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. | |
Asian shares rally | Asian shares rally |
Australia's benchmark index ended 5.6% higher and South Korea's main Kospi index finished up 3.8%. | Australia's benchmark index ended 5.6% higher and South Korea's main Kospi index finished up 3.8%. |
Hong Kong shares ended up 9.7% and Shanghai's benchmark index rose 3.65% after falling earlier. | Hong Kong shares ended up 9.7% and Shanghai's benchmark index rose 3.65% after falling earlier. |
But Taiwan stocks fell 2.15%. | But Taiwan stocks fell 2.15%. |
Japan's stock market was closed for a public holiday. | Japan's stock market was closed for a public holiday. |