The FTSE 100 Index pulled out of its tailspin today as investors welcomed plans for a dramatic bail-out of the European banking industry.
Banking shares in London were among the risers as the Footsie opened 200 points higher at 4132, a gain of 5%. The top flight fell almost 9% on Friday at the end of the market’s worst week since the 1987 crash.
Markets in Europe also enjoyed similar gains after nations agreed a raft of emergency measures designed to ease the credit crunch.
Countries which use the euro currency agreed on Sunday to temporarily guarantee bank refinancing and pledged to prevent banks from failing.
In London, investors were digesting details of the British government’s £37bn (€46.5bn) bail-out package for three of the UK’s biggest banking groups.
There had been speculation that bank shares could be suspended to give the City time to examine the rescue plan. No such move was implemented, despite traders facing a number of announcements from the banks and the Treasury between 7am and 7.45am.