World stocks soar on bank rescue plan

LONDON – Stock markets in Europe and Asia rose strongly for a second straight day Tuesday after Wall Street rallied from its worst week ever on optimism about government attempts to shore up the world’s battered financial system.

The FTSE 100 index of leading shares was up 200.68 points, or 4.7 percent, at 4,457.58, while Germany’s DAX was up 211.63, or 4.2 percent, at 5,274.08. The CAC-40 in France was 168.01 points, or 4.8 percent, stronger at 3,699.51.

The gains on Europe’s markets came in the wake of the strongest ever daily performance on Japan’s benchmark Nikkei 225 index, which surged 1,171.14 points, or 14.15 percent, to close at 9,447.57. Tokyo financial markets were playing catch-up to recent developments because they were closed Monday for a holiday.

Wall Street closed 11 percent higher Monday, its biggest daily jump since 1933, and is expected to open solidly later.

The resurgence in the markets followed the announcement Monday by European governments of a €1.7 trillion set of national packages to save ailing banks, and the confirmation that the United States will follow suit and buy stakes in nine U.S. financial institutions.

Late Monday in the United States, government officials and industry executives said the Bush administration would use $250 billion of the $700 billion bailout program recently passed by Congress to buy into American banks. The government initially will buy stock of nine large banks, but the program is expected to be expanded to many others.

President Bush planned to announce the details later Tuesday.

“The expectation of further announcements regarding cash injections into banks from the United States combined with the fact that certainly at the end of last week’s session equities were simply looking grossly oversold does seem to suggest that the current rally does have some chance of being sustainable,” said Matt Buckland, a dealer at CMC Markets in London.