VARIOUS: European stocks jump; toxic-debt plan, short-selling curbs lift spirts

Record ID: 492612

  • Title: VARIOUS: European stocks jump; toxic-debt plan, short-selling curbs lift spirts
  • Date: 20th September 2008
  • Summary: (BN09) MOSCOW, RUSSIA (SEPTEMBER 19, 2008) (REUTERS) EXTERIOR OF MICEX TRADING EXCHANGE MICEX ENTRANCE INTERIOR/TRADERS IN HALL CLOCK CHANGING TO 1030 LOCAL (0630GMT) MARKING START OF TRADING MICEX SIGN ON WALL VARIOUS OF TRADERS
  • Embargoed: 5th October 2008 13:00
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  • Topics: Economic News
  • Reuters ID: LVADXOYQGTNBM4GH8XFVGAMX4ITZ
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  • Story Text: European shares surged on Friday (September 19), led by recently battered insurers and banks boosted by a UK ban on short-selling financial stocks and hopes for a comprehensive U.S. government solution to bad banking assets.
    At 1047GMT, the FTSEurofirst 300 index <.FTEU3> of top European shares was up 6.4 percent at 1,131.32 points, recouping some of the sharp losses from earlier in the week. The benchmark is still down about 2.6 percent this week and has fallen 24.9 percent so far in 2008.
    Britain's FTSE <.FTSE> rose 7.97 percent, on track for its biggest daily percentage rise since the index was established in 1984. The biggest rise up until today was on October 21, 1987 when the index rose 7.9 percent, having fallen by more than 10 percent on each of the previous two days.
    The UK Financial Services Authority imposed a temporary ban on short-selling financial stocks on Thursday (September 18), while in the United Sates, the U.S. Securities and Exchange Commission followed suit on Friday with an immediate ban for an initial 10 days. French regulator AMF said it was also talking to other Eurozone regulators about market dealings, leading to expectations that the shorting ban would snowball.
    British Prime Minister Gordon Brown hinted at further co-ordinated action in world financial markets on Friday, saying talks were being held with Washington and Paris about steps that could be taken.
    Brown, who condemned "irresponsible behaviour" in the City on Thursday (September 18) -- shortly before the Financial Services Authority imposed the ban -- said he was exploring what further measures could be taken to restore calm.

    "The one thing that is absolutely clear; we will do everything in our power to ensure the stability of the system. Everything we are doing is designed to ensure there is investor confidence in the future, and every problem we have dealt with we have dealt with in a way that is decisive and designed to bring that stability into the system and we will continue to have talks with our international colleagues over the course of the next few hours," the prime minister said on the sidelines of a meeting in London with his Georgian counterpart Vladimir Gurgenidze.
    The German DAX gained 4.3 percent after Asian stocks rose sharply and major European stock markets were expecting to surge as a relief rally made its way around the world.
    In Frankfurt, the DAX was up more than 200 points and stood at around 6075 points at 09:40 a.m. (0740 GMT), marking a 3.7 percent gain.
    Frankfurt trader Oliver Roth of Close Brothers Seydler told Reuters Television the German market was moving towards stabilisation.

    "The mood is much better, simply because the American market showed us yesterday evening that there will be an end to the crisis and this stabilises also the German market," Roth said.
    Buyers flocked back to Russia's battered stock markets on Friday, sending prices soaring as trading resumed after a two-day halt and a $130 billion U.S. dollar emergency state support package helped restore confidence.
    The MICEX <.MCX> and RTS <.IRTS> bourses were twice forced to call brief suspensions of trading as sharp gains exceeded technical limits.
    By 1115 GMT, the MICEX index was up 25 percent and the RTS index was up 20 percent.
    Some banks and energy firms soared as much as 60 percent after authorities said they could spend up to $20 billion U.S. dollars on buying stocks of gas monopoly Gazprom <GAZP.MM>, oil major Rosneft <ROSN.MM> and bank VTB <VTBR.MM> to support the market and resell them at a profit in the future.
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