The US stock market staged a late rally yesterday, helping push the Dow Jones industrial average higher for the first time in a week.

Portugal will spend €4.9bn to rescue its largest listed bank, testing the eurozone’s resilience to another banking crisis just months after Lisbon exited an international bailout.

Portugal is providing €4.9bn in an emergency rescue to prevent the collapse of ailing bank Banco Espirito Santo, one of the country’s oldest and biggest financial institutions.

Markets showed signs of stabilising today after big losses yesterday in the wake of renewed fears about the health of the European banking sector.

Italy’s cost of borrowing surged yesterday as investors dumped the country’s bonds in the wake of the general election.