Bernanke’s call for further action helps rally US and European markets

HAVING shed 1.4% on Friday the Dow Jones Industrial Average was up more than 2% in early trading paving the way for a strong rally in European stocks.

Comments from US Federal Reserve chairman Ben Bernanke calling for another economic stimulus plan to boost the US economy also helped lift the various indices, analysts said.

The Fed boss said Congress “should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers,” in testimony to the House Budget Committee. “Such actions might be particularly effective at promoting economic growth and job creation,” he said.

Britain’s FTSE 100 index of leading shares closed up more than 5%, while in France the CAC 40 closed 3.6% higher with the German Dax up more than 1.12%.

Leading Dutch bank ING closed up more than 23% after the government injected €10 billion into the group for its capital base.

In Dublin the ISEQ 100 Index closed up 2.17%.

IL&P gained 4.32% to close at €3.62 as the market realises it has little or no exposure to the troubled property sector.

Its Tier 1 ratio of above 10% is also showing the bank in a more favourable light compared to some of its Irish peers where the Tier 1 ratios can be significantly lower.

Bank of Ireland suffered another bad day and was off almost 4.7% at €1.83 as fears grow it will be forced to go for a rights issue.

Similarly Anglo was down 2.73% to €2.03 while AIB, now regarded as the strongest of the Irish banks, gained almost 10% at €3.41.

Elsewhere McInerney Holdings, exposed to the British and Irish housing markets, fell a further 3% to 33c while Independent New & Media also continued to slide lower, ending the day down more than 6% at 73 cents.

Further volatility in the markets cannot be ruled out, with concerns persisting about the ability of the global financial sector to survive without radical changes in their composition.