Stock markets in Europe and Asia rose strongly today on mounting evidence that government attempts to shore up the world’s battered financial system were beginning to work.
The gains on Europe’s markets came in the wake of a record 14.15% gain for Japan’s Nikkei index.
In Dublin, the ISEQ index of Irish shares is currently up 80.43 points to 3,022.90.
In London, the FTSE 100 rose 6% despite news that inflation in Britain was at a 16-year high.
Germany’s DAX was up 5.1% even though a group of leading German economic think tanks said Tuesday that Europe’s largest economy is on the “brink of a recession”. The CAC-40 in France was 5.6% up.
Wall Street fluctuated but largely extended its big advance from yesterday as investors reacted enthusiastically to the US government’s plans to spend $250bn (€183.1m) buying stock in private banks.
US President George Bush the infusion of billions of dollars into the American banking sector was part of a systematic global strategy to calm markets and ensure “growth and prosperity”.
“Nations around the world are working together to overcome this challenge, and with confidence and determination, we will return our economies to the path of growth and prosperity,” he said.
The exception was Iceland whose stock exchange plummeted almost 70% when trading resumed today after being suspended since Friday after the government took control of the country’s three major banks. It later rose to a loss of only 5%.
Iceland has been hit particularly hard by the global credit squeeze because of its heavyweight banking sector.