A roundup of trading on major world markets:
NEW YORK – US stocks surged for a second day on Wednesday on signs that Europe was preparing a plan to contain the Greek crisis and protect the region’s banks from the effects of a Greek debt default.
The Dow Jones Industrial Average was up 131.24 points (1.21 per cent) to 10,939.95 in closing trade.
The broader S&P 500 added 20.07 points (1.79 per cent) to 1,144.03, while the tech-heavy Nasdaq Composite rose 55.69 (2.32per cent) to 2,460.51.
The surge came after Europe’s main markets added from three per cent to nearly five percent on expectations that EU leaders were close to agreement on how to deal with the eurozone sovereign debt crisis.
LONDON – European stock markets have closed sharply higher, bouncing back from sustained heavy losses on hopes European countries will support their banks to prevent the eurozone debt crisis from spreading.
German Chancellor Angela Merkel’s comment on recapitalising the banks seemed to confirm reports the European Union was working on such a plan to tame a crisis which claimed its first victim, Dexia bank, this week.
The news cheered markets which have fallen heavily on deepening gloom that the EU could come up with a plan for concerted action, with Greece’s debt problems now threatening not only the euro but global growth as well.
London’s FTSE-100 index of leading shares jumped 3.19 per cent to 5,102.17 points on Wednesday while in Frankfurt, the DAX soared 4.91 per cent to 5,473.03 points and in Paris the CAC-40 advanced 4.33 per cent to 2,973.90 points.
Other European markets posted similar gains, with Milan gaining nearly 4.0 per cent despite a sharp Moody’s ratings downgrade for Italy given its debt and growth problems.
The euro was lower at $1.3296, down from $1.3338 in New York late on Tuesday when it hit a 9-month low of $1.3146.
The US dollar rose to 76.86 yen from 76.82 yen.
European markets plunged on Tuesday on news Franco-Belgian lender Dexia was facing collapse, hit by lack of ready funding cash and a heavy exposure to debt-stricken Greece.
France and Belgium stepped in to guarantee Dexia financing after the stock slumped 22 per cent on Tuesday, allowing it to finish with a modest gain of over 1.0 per cent on Wednesday.
Officials said EU countries are building a co ordinated plan to recapitalise banks to avoid contagion from the debt crisis.
HONG KONG – Asian shares were mixed.
Tokyo fell 0.86 per cent, or 73.14 points, to 8,382.98, Seoul lost 2.33 per cent, or 39.67 points, to close at 1,666.52 points and Taipei shed 0.83 per cent, or 58.72 points, to 6,989.15.
However, Sydney’s benchmark S&P/ASX 200 closed in positive territory for the first time this week, ending 1.40 per cent higher, or 54.3 points, at 3,926.4.
Singapore was flat and Mumbai added 0.36 per cent.
Hong Kong and Shanghai were closed for public holidays.
The region was given a strong lead from Wall Street, where the Dow closed up 1.44 per cent, the S&P 500 rose 2.25 per cent and the Nasdaq added 2.95 per cent after the EU’s Economic Affairs Commissioner said leaders were working on a plan to help banks.
The lack of movement on a solution to the Greek problem raised the prospect that holders of Athens’ debt, already expecting to take a 20 per cent “haircut” on its value, could now find it written down more than 50 per cent if it cannot raise any more money and defaults as a result.
Pessimism over Greece has grown as European leaders are at odds over the best way to boost the ailing country and protect other economies and bond holders if it does eventually default.
WELLINGTON – Wellington ended 0.2 per cent higher, or 7.08 points, to 3,327.47.
