FTSE Roars into Life as Investors Back Europe's Bank Rescue Plans
London's FTSE 100 Index yesterday roared back from last week's crash as bank rescue plans in the UK and across Europe found favour with investors.
The rebound saw the Footsie surge 8.3 per cent - its second biggest daily percentage rise ever - adding almost pounds 78 billion to the value of the blue-chip index.
The much-needed 324.8 point gain followed a week of turmoil in which the Footsie lost more than 21 per cent - or pounds 250 billion - in the worst week since the 1987 crash. The Footsie closed at 4256.9.
Indices across Europe also recovered some lost ground after nations agreed a raft of emergency measures designed to ease the credit crunch.
And in the US the benchmark Dow Jones Industrial Average gained more than six per cent as President George Bush said the government would help banks gain access to capital and unfreeze money markets.
Central banks including the Bank of England, US Federal Reserve and the European Central Bank said they were ready to pump unlimited amounts into money markets.
The dramatic move came alongside the Treasury's plans to inject up to pounds 37 billion into Royal Bank of Scotland, Halifax Bank of Scotland and Lloyds TSB.
Shares in the trio were hit as investors worried about the dilutive impact of a major Government shareholding in the bank and the prospect of vanishing dividends.
HBOS tumbled 28 per cent, Lloyds fell 14 per cent and RBS eight per cent, although Barclays - attempting to shore up its finances without Government help - added four per cent. …