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Shares rise as confidence returns Shares rise as confidence returns
(19 minutes later)
Stock markets in Europe and Asia have forged higher, as investors bet that state action to strengthen the banking system will ease the credit crisis. Stock markets worldwide have powered higher, as investors bet that state action to strengthen the banking system will ease the credit crisis.
London's FTSE 100 index rose 5%, while Japan's Nikkei stock index posted a record 14% gain. In New York, the Dow Jones index rose 4%, the UK's FTSE 100 index climbed 5% and Japan's Nikkei saw a record gain.
The US has unveiled details of a plan to take stakes in banks, following steps by the UK and European leaders.The US has unveiled details of a plan to take stakes in banks, following steps by the UK and European leaders.
US shares are set to open higher on hopes that a financial meltdown has been averted. Investors are growing more confident that a complete financial meltdown has been averted.
In early afternoon trade, the FTSE 100 was up 217.6 points at 4,474.5 points. Bank shares led the gains, with Barclays up 18%. The Dow Jones index was up 376.74 points at 9,764.35 points shortly after the opening bell in New York.
In early afternoon trade, the FTSE 100 was up 217.6 points at 4,474.5 points.
In France the Cac 40 was up 5.45% or 192 points, at 3,723.92, while in Germany the Dax index climbed 5.43%, or 274.7 points, to 5,337.14In France the Cac 40 was up 5.45% or 192 points, at 3,723.92, while in Germany the Dax index climbed 5.43%, or 274.7 points, to 5,337.14
FTSE 100 INDEX: 14 October 2008*All Times GMTFTSE 100 INDEX: 14 October 2008*All Times GMT
ReboundRebound
Investors worldwide welcomed the fresh moves to deal with the financial crisis.Investors worldwide welcomed the fresh moves to deal with the financial crisis.
If HM Treasury were the corporate finance department of one of those battered investment banks that are now being rescued, it would be collecting a very fat fee Robert Peston, BBC business editor Read Robert's blogUS unveils $250bn banking rescue If HM Treasury were the corporate finance department of one of those battered investment banks that are now being rescued, it would be collecting a very fat fee Robert Peston, BBC business editor Read Robert's blogUS unveils $250bn banking rescue
In Japan, the Nikkei 225 index ended up 14.2% at 9,447.57 points - its biggest one-day gain to date - as it caught up with gains elsewhere after a public holiday on Monday.In Japan, the Nikkei 225 index ended up 14.2% at 9,447.57 points - its biggest one-day gain to date - as it caught up with gains elsewhere after a public holiday on Monday.
Hong Kong's Hang Seng index ended up 520.4 points, or 3.2%, at 16,832.56. South Korea's index finished the day 6.14% higher.Hong Kong's Hang Seng index ended up 520.4 points, or 3.2%, at 16,832.56. South Korea's index finished the day 6.14% higher.
In India, the benchmark Sensex was up 499.42 points, or 4.42%, to 11,808.51 in early trade. In India, the benchmark Sensex closed up 174.31 points, or 1.54% percent, at 11,483 points.
"There's relief that banks probably won't go bankrupt thanks to the capital injection plans," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments."There's relief that banks probably won't go bankrupt thanks to the capital injection plans," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
"But after rebounding to some extent, we will inevitably enter a phase of thinking about how the steps will actually impact the global economy.""But after rebounding to some extent, we will inevitably enter a phase of thinking about how the steps will actually impact the global economy."
Japan said it was considering pumping taxpayers' money into regional banks to make sure small firms can get loans.Japan said it was considering pumping taxpayers' money into regional banks to make sure small firms can get loans.
Australia's main share index ended the day up 3.7% after Australian Prime Minister Kevin Rudd announced a 10.4bn Australian dollar ($7.3bn) economic stimulus package.
It will allow for one-off payments to the country's low-wage earners and pensioners and follows earlier announcements of guarantees of bank deposits for three years.
Trading has resumed on the Icelandic stock exchange for the first time since its suspension last Thursday.
The main share index immediately fell 76%, but officials said this was a statistical anomaly caused by trading remaining suspended in financial firms.
Rescue plansRescue plans
The US government has announced a $250bn (£143bn) plan to purchase stakes in a wide variety of banks in an effort to restore confidence in the sector.The US government has announced a $250bn (£143bn) plan to purchase stakes in a wide variety of banks in an effort to restore confidence in the sector.
President George W Bush said the move would help to return stability to the US banking sector and ultimately help preserve free markets.President George W Bush said the move would help to return stability to the US banking sector and ultimately help preserve free markets.
US federal authorities will also temporarily insure most new debt issued by US banks and expand deposit insurance.US federal authorities will also temporarily insure most new debt issued by US banks and expand deposit insurance.
DOW JONES INDUSTRIAL AVERAGE: 10 October 2008*All Times GMT
The US move follows similar steps taken by the UK government, which on Monday said it would inject up to £37bn of taxpayers cash into Royal Bank of Scotland, Lloyds TSB and HBOS.The US move follows similar steps taken by the UK government, which on Monday said it would inject up to £37bn of taxpayers cash into Royal Bank of Scotland, Lloyds TSB and HBOS.
Likewise, European governments have said they are allocating more than 1 trillion euros to protect the continent's banks through guarantees and other emergency measures.Likewise, European governments have said they are allocating more than 1 trillion euros to protect the continent's banks through guarantees and other emergency measures.
BBC business editor Robert Peston said the US and eurozone plans were variations on the template launched a week ago by the UK government despite reservations expressed by other leaders.BBC business editor Robert Peston said the US and eurozone plans were variations on the template launched a week ago by the UK government despite reservations expressed by other leaders.
"If HM Treasury were the corporate finance department of one of those battered investment banks that are now being rescued, it would be collecting a very fat fee," he said."If HM Treasury were the corporate finance department of one of those battered investment banks that are now being rescued, it would be collecting a very fat fee," he said.
Australian action
Australia's main share index ended the day up 3.7% after Australian Prime Minister Kevin Rudd announced a 10.4bn Australian dollar ($7.3bn) economic stimulus package.
It will allow for one-off payments to the country's low-wage earners and pensioners, and follows earlier announcements of guarantees of bank deposits for three years.
Trading has resumed on the Icelandic stock exchange for the first time since its suspension last Thursday.
The main share index immediately fell 76%, but officials said this was a statistical anomaly caused by trading in financial firms remaining suspended.


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