US shares have risen strongly as markets welcomed fresh government moves to end the recent financial turmoil.

The US government said it would quickly implement its financial rescue plan, and summoned bank bosses to a meeting to work out the details.

Wall Street’s main Dow Jones index soared nearly 8% in afternoon trading – after earlier gains in Europe and Asia.

The increases came after fresh moves by European governments to inject more public funds into banks.

In Washington President George W Bush said he was confident that the challenges which faced governments trying to curb the market turmoil could be overcome.

“We can work our way through these challenges and America will continue to work closely with the other nations to co-ordinate our response to this global financial crisis,” he said.

On Monday US Treasury and Federal Reserve Bank officials were due to meet with the chief executives of some of America’s biggest banks, to work out details of the US government’s $700bn (£400bn) bail-out package.

The US is also getting ready to follow in Europe’s footsteps and purchase stakes in financial institutions.

“We are designing a standardised programme to purchase equity in a broad array of financial institutions,” said Neel Kashkari, the treasury official in charge of the bail-out plan.

European governments have said they are putting up to 1.7 trillion euros ($2.3 trillion; £1.3 trillion) to protect the continent’s banks through guarantees and other emergency measures.

The sums are a maximum, and might not all be spent if the financial crisis eases.

So far Germany has approved a bank rescue plan worth up to 500bn euros, France will spend about 350bn euros, the Netherlands has pledged 200bn euros, Spain 100bn euros, and Austria 85bn euros.

Italy said it would spend as much as was needed, without giving any exact figures.

The bulk of the European money will be used to guarantee lending between banks – part of a plan agreed this weekend by the 15 nations that use the euro.

The cash will also be used to take stakes in ailing banks.

UK bank move

In other key developments on Monday:

– The UK government said it would inject up to £36bn of taxpayers cash into Royal Bank of Scotland, Lloyds TSB and HBOS
– The news lifted UK shares, with the main FTSE 100 index advancing 325 points or 8.2% to 4,256
– However, shares in the three UK banks affected end down heavily, with HBOS losing 27%, Lloyds TSB falling 14% and Royal Bank of Scotland slipping 8.3%
– Germany’s Dax index added 518 points, or 11% to 5,062, while France’s Cac 40 climbed 355 points, or 11% to 3,531
– Some central banks said they would offer financial institutions an unlimited amount of short-term dollar loans to help stem the crisis
– The Icelandic stock exchange said share trading would remain suspended until Tuesday due to continuing “unusual market conditions”

Momentous day

“Today marks another momentous day in both UK and global financial history,” said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.

“It seems Mr Brown and Co. have no choice in this matter and these takeovers are necessary, but its very wrong that it is the tax payer that should have to do this” Anthony Halpin, Aberdeen

Send us your comments”The hope in the markets is that political leaders have finally ‘grasped the nettle’, with substantial and coherent rescue plans now being formulated and rolled into place.”

The cash injection moves by Germany, France and Spain follow after talks between all 15 eurozone countries in Paris on Sunday.

The two-fold plan involves guaranteeing lending between banks and taking stakes in financial institutions – similar to the bank rescue in the UK announced last week.

News reported by The BBC

Leading US shares have surged, boosted by a report that the US government might announce a new plan that would help tackle the financial crisis.

The leading Dow Jones Industrial Average added more than 400 points, or 3.86%, to 11,019.69, a rise of 560 points from its low of the day.

Treasury Secretary Henry Paulson was looking to create a repository for bad bank debt, CNBC reported.

World markets have been volatile in the wake of huge upheavals among banks.

Since the start of the week, Lehman Brothers has collapsed, the Federal Reserve has bailed out insurance giant AIG, Merrill Lynch has been acquired by Bank of America and in the UK, Lloyds TSB has acquired HBOS.

US investors were boosted on Thursday by the hope of a broad-reaching federal intervention that might lead to the creation of an entity to take on the bad debt that has hit finance firms.

Only a day earlier the Dow Jones index had fallen by more than 4%.

CNBC said that Mr Paulson was looking into setting up something akin to the Resolution Trust Corp, which was formed after savings and loans banks collapsed in the 1980s.

The past few days have seen a number of dramatic developments on financial markets. Thursday’s key events include:

– Central banks from the UK, US, Europe, Canada, Switzerland and Japan are releasing $180bn into their money markets. The move is the fourth such concerted effort since the onset of the credit crisis last year.
– The news helped to reduce the interest rate at which banks lend to each other – a key factor behind the problems in credit markets.
– Cautious investors are looking for safer places to put their money. The price of gold, regarded as a haven in troubled times, rose to $871.2 an ounce after recording its biggest one-day gain in history on Wednesday.
– Lloyds TSB released details of its £12.2bn takeover of HBOS. The deal values HBOS shares at 232p each and is expected to lead to cost savings of £1bn a year and could also result in significant job losses.
– Russia’s main stock exchange suspended trading for a second consecutive day as the government tried to halt a sharp fall in share prices and restore confidence in the economy.
– The UK’s Financial Services Authority has announced steps to restrict short-selling of shares while New York’s attorney general has launched a probe into short-selling.

Bush concern

Earlier on Thursday, European markets had been mixed.

The Paris Cac shed 1.06% to end at 3957.86 and London’s FTSE 100 ended 0.6% lower at 4880. In Frankfurt, the Dax closed 0.04% up, at 5863.42.

Bush seeks to reassure markets

US President George W Bush said he was closely monitoring the situation on financial markets and the recent actions taken by the Federal Reserve and other regulators were “necessary and important”.

“We will continue to act to strengthen and stabilise our financial markets and improve investor confidence,” he said.

Banks take action

Earlier on Thursday six of the world’s top central banks took steps to calm worried stock markets, releasing $180bn (£99bn) to lift the amount of credit available.

“The credit crunch is creating a new world order in banking and finance” Robert Peston, BBC business editor

While the move was viewed positively, there were concerns the impact would be short-lived.

“Markets know that central banks don’t own a magic bullet, otherwise they would have used it already,” Sean Callow, currency strategist at investment firm Westpac.

“And we’ve seen these sorts of steps before; it only addresses one of the symptoms of the underlying crisis.”

In Asia, Hong Kong ended flat at 17,632.5 after earlier falling by 7% as fears of more company failures gripped investors.

Tokyo’s Nikkei share index ended 2% lower. Share indexes in Shanghai, Taiwan and India fell by between 3 and 5%.

News reported by The BBC