Global shares rocket on fresh government intervention

LONDON – Global stock markets soared yesterday, with Frankfurt up six per cent and Hong Kong 10 per cent higher as governments pumped billions of extra dollars into banks crippled by the credit crunch.

Leading indices had plunged by almost a quarter in value last week on a collapse of confidence in the global financial system, while some shed as much as 10 per cent just on Friday in the worst performance for 21 years. “We have had our first significant bounce in the markets for sometime now,” City Index market strategist Joshua Raymond said in London.”It’s a dangerous time to start believing we have hit a bottom in the markets.With the volatility here to stay and confidence likely to seesaw for sometime, we are only really going to be able to tell if we have hit a bottom a month after we have done so,” he added.Central banks in Europe fired a new broadside yesterday to free up frozen lending, by providing commercial banks with unlimited amounts of dollars in a joint operation that might be reinforced by their key Japanese ally.Governments in Berlin, Paris and Rome were to announce more than half a trillion euros in rescue funds for Europe’s stumbling banking sector, as each puts a price tag on a joint bail-out plan .Leaders of the 15-country eurozone single currency bloc, following the lead of Europe’s financial giant Britain, agreed on Sunday on a high-stakes joint bid to pull the world financial system back from the brink of collapse.Britain said it would invest up to 37 billion pounds (47 billion euros, 64 billion dollars) in ailing British banks Royal Bank of Scotland, HBOS and Lloyds TSB.Germany was to unveil a 470-billion-euro rescue package to save the country’s banks from collapse, government sources said.”Friday’s late rally on Wall Street, a positive start to trade in Asia and news of widespread government intervention on a worldwide basis to prop up ailing banks looks likely to give equity traders …something to cheer as the new weeks gets underway,” said CMC Markets dealer Matt Buckland.”But there has to be a degree of caution in the whole equation too.”After all, we’ve seen high level plans from various quarters that were set to thaw frozen credit markets but the overall reaction has repeatedly been rather muted and the cynics will be left thinking that today could ultimately end up being more of the same,” Buckland added.In midday trade, Frankfurt’s stock market was up a huge 6.15 per cent and Paris soared 6.36 per cent.London won 4.84 per cent, Madrid rallied 6.85 per cent and Zurich rocketed 7.63.Hong Kong closed up 10.2 per cent yesterday while Tokyo, Asia’s largest stock market, was shut for a public holiday after slumping 24 per cent last week.The Saudi Arabia stock market, the largest in the Arab world, soared 5.5 per cent at the opening on Monday to above the 6 000-point mark after hitting a four-year low two days ago.- Nampa-AFP”We have had our first significant bounce in the markets for sometime now,” City Index market strategist Joshua Raymond said in London.”It’s a dangerous time to start believing we have hit a bottom in the markets.With the volatility here to stay and confidence likely to seesaw for sometime, we are only really going to be able to tell if we have hit a bottom a month after we have done so,” he added.Central banks in Europe fired a new broadside yesterday to free up frozen lending, by providing commercial banks with unlimited amounts of dollars in a joint operation that might be reinforced by their key Japanese ally.Governments in Berlin, Paris and Rome were to announce more than half a trillion euros in rescue funds for Europe’s stumbling banking sector, as each puts a price tag on a joint bail-out plan .Leaders of the 15-country eurozone single currency bloc, following the lead of Europe’s financial giant Britain, agreed on Sunday on a high-stakes joint bid to pull the world financial system back from the brink of collapse.Britain said it would invest up to 37 billion pounds (47 billion euros, 64 billion dollars) in ailing British banks Royal Bank of Scotland, HBOS and Lloyds TSB.Germany was to unveil a 470-billion-euro rescue package to save the country’s banks from collapse, government sources said.”Friday’s late rally on Wall Street, a positive start to trade in Asia and news of widespread government intervention on a worldwide basis to prop up ailing banks looks likely to give equity traders …something to cheer as the new weeks gets underway,” said CMC Markets dealer Matt Buckland.”But there has to be a degree of caution in the whole equation too.”After all, we’ve seen high level plans from various quarters that were set to thaw frozen credit markets but the overall reaction has repeatedly been rather muted and the cynics will be left thinking that today could ultimately end up being more of the same,” Buckland added.In midday trade, Frankfurt’s stock market was up a huge 6.15 per cent and Paris soared 6.36 per cent.London won 4.84 per cent, Madrid rallied 6.85 per cent and Zurich rocketed 7.63.Hong Kong closed up 10.2 per cent yesterday while Tokyo, Asia’s largest stock market, was shut for a public holiday after slumping 24 per cent last week.The Saudi Arabia stock market, the largest in the Arab world, soared 5.5 per cent at the opening on Monday to above the 6 000-point mark after hitting a four-year low two days ago.- Nampa-AFP