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European and Asian shares surge European and Asian shares surge
(about 1 hour later)
Stocks across Europe and Asia have rebounded, following strong gains for US stocks on Wednesday.Stocks across Europe and Asia have rebounded, following strong gains for US stocks on Wednesday.
By 1040 GMT, London's FTSE 100 index was up 3.1%, in Paris the Cac 40 rose 4.2% and Frankfurt's Dax was up 4.5%. By 1215 GMT, London's FTSE 100 index was up 3.9%, in Paris the Cac 40 rose 4.6% and Frankfurt's Dax was up 5.8%.
In Asia, Japan's benchmark Nikkei index closed 2.1% higher, while key share indexes climbed by more than 2% in Mumbai, Hong Kong and Sydney.In Asia, Japan's benchmark Nikkei index closed 2.1% higher, while key share indexes climbed by more than 2% in Mumbai, Hong Kong and Sydney.
The rebound came on hopes of a rescue plan for US bond insurers that could prevent a new wave of asset writedowns.The rebound came on hopes of a rescue plan for US bond insurers that could prevent a new wave of asset writedowns.
Falls reversedFalls reversed
The plan would bail out bond insurers, which lie at the heart of the financial system, guaranteeing about $2 trillion of assets.The plan would bail out bond insurers, which lie at the heart of the financial system, guaranteeing about $2 trillion of assets.
"It would be logical that US and European banks would coordinate with regulators in the United States to help bail out these insurers because if these guys would fail, it would be much more catastrophic for banks' balance sheets and we would see another round of writedowns," said Edmund Shing, strategist at BNP Paribas in Paris. "It would be logical that US and European banks would coordinate with regulators in the United States to help bail out these insurers.
"If these guys would fail, it would be much more catastrophic for banks' balance sheets and we would see another round of writedowns," said Edmund Shing, strategist at BNP Paribas in Paris.
The hopes had led US share prices to close higher on Wednesday, reversing falls seen earlier in the day.The hopes had led US share prices to close higher on Wednesday, reversing falls seen earlier in the day.
All three US stock market indexes erased deep losses on Wednesday to end ahead.All three US stock market indexes erased deep losses on Wednesday to end ahead.
The Dow Jones ended up 2.5% at 12,270.17, the Nasdaq turned around a 4% decline to close up 1% and Standard & Poor's 500 Index rose 2.14% to 1,338.60.The Dow Jones ended up 2.5% at 12,270.17, the Nasdaq turned around a 4% decline to close up 1% and Standard & Poor's 500 Index rose 2.14% to 1,338.60.
You do have to rescue markets, otherwise you would go into a depression, as you did in the 1930s George Soros Chill on Wall StreetSend us your commentsYou do have to rescue markets, otherwise you would go into a depression, as you did in the 1930s George Soros Chill on Wall StreetSend us your comments
Panic had swept through stock markets worldwide earlier this week on fears that key global economies would enter recession.Panic had swept through stock markets worldwide earlier this week on fears that key global economies would enter recession.
On Tuesday, the US Federal Reserve made its biggest rate cut for 25 years - slashing its main interest rate to 3.5% from 4.25% - to try to lift growth and bolster markets.On Tuesday, the US Federal Reserve made its biggest rate cut for 25 years - slashing its main interest rate to 3.5% from 4.25% - to try to lift growth and bolster markets.
However, worries persisted that the move might have come too late, as many firms have already reported lower profits and a worsening business environment.However, worries persisted that the move might have come too late, as many firms have already reported lower profits and a worsening business environment.
Fragile marketsFragile markets
On Tuesday, the European Central Bank hinted it would not follow the Fed by cutting rates, and analysts said the Bank of England was unlikely to accelerate rate cuts.On Tuesday, the European Central Bank hinted it would not follow the Fed by cutting rates, and analysts said the Bank of England was unlikely to accelerate rate cuts.
Speaking to the BBC, billionaire investor George Soros said it was going to be difficult for the UK and US to avoid a recession, even after the Fed's dramatic rate cut.Speaking to the BBC, billionaire investor George Soros said it was going to be difficult for the UK and US to avoid a recession, even after the Fed's dramatic rate cut.
Mr Soros said he supported the Fed's move.Mr Soros said he supported the Fed's move.
"You do have to rescue markets, otherwise you would go into a depression, as you did in the 1930s," he said."You do have to rescue markets, otherwise you would go into a depression, as you did in the 1930s," he said.