Muted investor enthusiasm for US bank plan

It seems that investors did not really know what to make of a US government plan to directly inject capital into financial institutions there by buying shares.

European share indexes at first rose when details were released, but as the day went on they trimmed those gains as a US rally dwindled.

However all of the region’s major stock exchanges ended the session up at least two and a half per cent.

The biggest gainers in Europe were banks.

The US measures did have some effect on the frozen credit markets with the cost of borrowing in dollars for three months dropping by the most since March.

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