European and Asian stocks have risen on optimism that the White House and the Federal Reserve will steer the world's largest economy out of a recession.
European and Asian stocks have risen on optimism that the White House and the Federal Reserve will steer the world's largest economy out of a recession.
A US plan to spend $150bn (£76bn) reviving its economy helped to send the UK's FTSE 100 index up 1%, while Germany's Dax index added 2.55%.
A US plan to spend $150bn (£76bn) reviving its economy helped to send the UK's FTSE 100 index up 1%, while Germany's Dax index added 2.55%.
The move came days US rates were cut to 3.5% from 4.25% and amid talk of a rescue plan for bond insurers.
The move came days US rates were cut to 3.5% from 4.25% and amid talk of a rescue plan for bond insurers.
Earlier Asian stocks made gains, with Japan's Nikkei 225 closing up 4%.
Earlier Asian stocks made gains, with Japan's Nikkei 225 closing up 4%.
Relief rally
Relief rally
With millions of US consumers set to get tax rebates, the hope is that a US recession will be prevented and the risk of those problems spreading to other key global economies will be minimised.
With millions of US consumers set to get tax rebates, the hope is that a US recession will be prevented and the risk of those problems spreading to other key global economies will be minimised.
The US has done many things to stabilise the market but all the bad news is not yet out there Heinz-Gerd Sonnenschein, Postbank
The US has done many things to stabilise the market but all the bad news is not yet out there Heinz-Gerd Sonnenschein, Postbank
Relief at key White House measures, in addition to the Fed cutting US interest rates by the biggest amount in two decades, overshadowed a massive fraud at French bank Societe General.
Relief at key White House measures, in addition to the Fed cutting US interest rates by the biggest amount in two decades, overshadowed a massive fraud at French bank Societe General.
A rogue trader has been accused of creating a loss of 4.9bn euros, but confidence in banks worldwide appeared to be unaffected.
A rogue trader has been accused of creating a loss of 4.9bn euros, but confidence in banks worldwide appeared to be unaffected.
Shares in Societe General rose 1.7% earlier after a sell-off on Thursday.
Shares in Societe General rose 1.7% earlier after a sell-off on Thursday.
An upbeat trading forecast from L'Oreal, the world's biggest beauty group, also helped to calm nerves after a number of recent profit warnings.
An upbeat trading forecast from L'Oreal, the world's biggest beauty group, also helped to calm nerves after a number of recent profit warnings.
But analysts expected more volatility in the short term.
But analysts expected more volatility in the short term.
"We expect sharp gains and losses in the next few days and weeks," said Heinz-Gerd Sonnenschein, a strategist at Postbank in Germany.
"We expect sharp gains and losses in the next few days and weeks," said Heinz-Gerd Sonnenschein, a strategist at Postbank in Germany.
"The US has done many things to stabilise the market but all the bad news is not yet out there."
"The US has done many things to stabilise the market but all the bad news is not yet out there."
Stimulus measures
Stimulus measures
On Thursday, the White House and the Democrats in Congress agreed a package of measures to boost economic growth in the US, where fears of a recession have risen.
On Thursday, the White House and the Democrats in Congress agreed a package of measures to boost economic growth in the US, where fears of a recession have risen.
This included a tax rebate to some 117 million US homes of up to $600 for individuals and up to $1,200 for married couples.
This included a tax rebate to some 117 million US homes of up to $600 for individuals and up to $1,200 for married couples.
House of Representatives Speaker Nancy Pelosi said Congress would act on the deal "at the earliest date, so those rebate cheques will be in the mail".
House of Representatives Speaker Nancy Pelosi said Congress would act on the deal "at the earliest date, so those rebate cheques will be in the mail".
The tax rebates for households should total $100bn, while businesses will benefit from up to $50bn of tax cuts.
The tax rebates for households should total $100bn, while businesses will benefit from up to $50bn of tax cuts.
"Because the country needs this boost to the economy now, I urge the House and the Senate to enact this economic growth agreement into law as soon as possible," said President George W Bush.
"Because the country needs this boost to the economy now, I urge the House and the Senate to enact this economic growth agreement into law as soon as possible," said President George W Bush.
Asia boost
Asia boost
Many Asian economies are still closely tied to US demand for their exports despite the development of China as a major importer.
Many Asian economies are still closely tied to US demand for their exports despite the development of China as a major importer.
So fresh hopes that the US consumer will carry on spending lifted shares across the board from financial firms to carmakers and technology stocks.
So fresh hopes that the US consumer will carry on spending lifted shares across the board from financial firms to carmakers and technology stocks.
The benchmark index in Hong Kong, the Hang Seng, closed up 6.7% at 25,122.37, while Japan's Nikkei 225 rose 4% to end at 13,629.2.
The benchmark index in Hong Kong, the Hang Seng, closed up 6.7% at 25,122.37, while Japan's Nikkei 225 rose 4% to end at 13,629.2.
Stock markets in South Korea, Taiwan, the Philippines and Australia also rose.
Stock markets in South Korea, Taiwan, the Philippines and Australia also rose.
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