US stocks markets surged by almost 7% tonight after the Obama administration detailed a plan to purge toxic assets from banks’ balance sheets, fueling optimism about a revival in bank lending.
Led by financial shares, the Dow Jones jumped 497 (6.8%) to close at 7,776, while the Nasdaq gained 99 points (6.8%) to 1,556.
The banking plan also encouraged European markets to close at monthly highs this evening. London's FTSE soared 110 points (2.9%) to close at 3,953, while the Paris CAC rose 78 points ( 2.8%) to end at 2,870 and the Frankfurt DAX jumped 108 points (2.65%) to 4,176 this evening.
Dublin's ISEQ index reversed earlier losses to close 17 points (0.8%) higher at 2,163. The banks were mixed with AIB adding over 5% to close at 70 cent and Bank of Ireland gaining 3% to end at 51 cent. However, shares in Irish Life and Permanent closed over 2.5% lower at €1.26 while shares in McInerney Holdings lost 5% to close at nine cent after it reported pre-tax losses of €206.5m for last year and warned of an uncertain future if conditions worsen.
Earlier, shares in Tokyo's Nikkei jumped 270 points (3.4%) to close at 8,216 - the best finish since January 29 - on the back of hopes that the US banks plan could result in a turning point for the world economy.
