Shares rebound on European bank rescues

Stock markets made a spectacular recovery on Monday as investors celebrated European governments launching bank bailouts.

The rescue packages are designed to combat the global financial crisis. They came in tandem with central banks saying they would relax lending to commercial banks to unfreeze credit markets.

As a result, indexes shot up. Frankfurt, Paris and Milan rose over 11 per cent and London more than eight per cent.

This all follows a weekend of crisis talks including a European summit in which leaders agreed on coordinated action and pledged to support a financial system on the brink of collapse.

Britain has now committed around 500 billion euros, Germany about the same and France 360 billion, Spain is looking at 100 billion while Italy is preparing a package. As one stock analyst said: “The hope in the markets is that political leaders have finally grasped the nettle with substantial and coherent rescue plans.”

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