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World markets soar on possible US rescue package
(Agencies)
Updated: 2008-09-19 20:35 HONG KONG -- Global stock markets soared Friday after a punishing week as news of a possible US government plan to rescue banks from toxic mortgage debt brought hope of a letup in the world's worst financial crisis in decades.
Hong Kong's Hang Seng Index surged a stunning 9.6 percent to 19,327.73, while Japan's Nikkei 225 average rose 3.8 percent to 11,920.86. As trading opened in Europe, Britain's FTSE 100 jumped 8 percent to 5,268.70 and France's CAC 40 shot up 6.5 percent. Germany's DAX added 3.9 percent. Wrapping up one of the most turbulent weeks in memory, Asian and European markets surged after an overnight rally on Wall Street, where the Dow Jones industrial average advanced 410.03, or 3.86 percent, to 11,019.69 -- the biggest percent gain since October 2002. Investors also took heart from word that the US government was seeking the power to rescue banks by buying distressed assets at the heart of the financial system turmoil that's brought down Wall Street giants Lehman Brothers, Merrill Lynch and Bear Stearns -- news that sent global markets plunging earlier this week. Details of the plan were still being worked out, but US Treasury Secretary Henry Paulson emerged from a nighttime meeting on Capitol Hill to say he hoped to have a solution "aimed right at the heart of this problem." "It definitely gives investors a light at the end of the tunnel," said Daniel McCormack, a strategist for Macquarie Securities in Hong Kong. "The solution is of such a magnitude that it could eventually fix the problems ... That's hugely important at the moment because that's what markets are focused on." The biggest bonus of a potential government fix is it could help the banking industry as a whole, said Scott Fullman, director of derivative investment strategy for New York-based institutional broker WJB Capital Group. Until now, the US government has selectively bailed out institutions that were the most vulnerable. |
