Stock markets await details of US banking rescue plan

Shares on the FTSE 100 rose by 5.5% in morning trading today, adding to the rise yesterday following the £37 billion banking rescue plan announced by the Government.

Across the Atlantic, the Dow Jones industrial average closed yesterday up 936 points after it lost 20% of its value on Friday, suffering its largest weekly fall since the Dow Jones index was created in 1896.

Meanwhile, Germany’s Dax was up 4.7% this morning while France’s Cac 40 index gained 5.2%.

Japan’s main Nikkei index closed 14% up today to 9,448 - the biggest daily rise in its history.

The much-needed recovery on the global stock markets came as Britain led the way by announcing the £500 billion rescue scheme last week.

Yesterday, countries in the euro zone committed to €2 trillion (£1.6 trillion) to support struggling banks. The co-ordinated action, involving Germany, France, Austria and Spain, came following a meeting of the 15 European nations over the weekend held in Paris.

According to French president, Nicolas Sarkozy, we will see that a united Europe has done more than the United States in terms of the total sums committed.

Sarkozy, whose country currently holds the rotating EU presidency, said the rescue plan was essential in order to avoid total collapse of the financial system.

In related news, French banking giant, Société Générale, has denied today it is in trouble and might need emergency funds. The bank has requested an investigation into potential manipulation of its share price.

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