LONDON, Sept 24 (Reuters) - European shares rose early on Wednesday, helped by EDF's (EDF.PA: Quote, Profile, Research, Stock Buzz) agreed bid for British Energy (BGY.L: Quote, Profile, Research, Stock Buzz) and news that Warren Buffett's Berkshire Hathaway Inc will invest $5 billion in U.S. Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz).
By 0846 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,113.30 points after rising as high as 1,116.45. The benchmark closed 1.6 percent lower on Tuesday and is down about 26 percent so far this year.
A move by central banks to inject money into the financial system also lifted sentiment.
The U.S. Federal Reserve moved for the second time in 24 hours to keep the wheels of the financial world turning, acting in concert with Australia and Scandinavia to supply money markets with $30 billion in funds.
Showing posts with label Europe's Stoxx. Show all posts
Showing posts with label Europe's Stoxx. Show all posts
Wednesday, September 24, 2008
Tuesday, September 23, 2008
Weak opening in European markets
Weak opening in European markets pulled the key indices sharply
lower in afternoon trade. The 30-share BSE Sensex was down 220.08
points. Index heavyweight Reliance Industries held firm in positive
territory, while Ranbaxy Laboratories slipped further. Selling was
also visible in the mid-cap and small-cap counters.
European markets opened lower. Key indices in UK, France and
Germany were down 0.56% to 1.41%. Asian markets, which opened
before Indian markets, were mixed. Key indices in China, Hong Kong
and Singapore were down by 1.56% to 3.34%. However, key indices in
Taiwan and South Korea were up by 1.17% to 1.44%. Japanese
financial markets were closed today for Autumnal Equinox Day, a
national holiday.
At 13:20 IST, the BSE 30-share Sensex was down 220.08 points or
1.57% to 13,774.88. The index shed 273.54 points at the day's low
of 13,721.42, hit in the onset of trading session. The Sensex fell
16.7 points at day's high of 13,978.26, hit in mid-morning.
The S&P CNX Nifty was down 50.35 points or 1.19% to 4172.70.
The BSE Mid-Cap index was down 1.23% at 5,156.67 and the BSE
Small-Cap index was down 0.86% at 6,140.93.
The market breadth was weak on BSE with 761 shares advancing as
compared to 1672 that declined. 65 shares remained unchanged.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) rose 1.32% at Rs 2063. The
stock came off session's low of Rs 2,000. Reliance Industries (RIL)
began production of crude oil at KG-D6 block of the Krishna
Godavari basin on 17 September 2008, the company said on 22
September 2008. RIL holds 90% participating interest in the block
while the balance is being held by Niko Resources.
India's largest drug maker by sales Ranbaxy Laboratories declined
10.74% at Rs 310 on reports the Canadian drug regulator, Health
Canada, issued a notice to Ranbaxy saying it will be particularly
cautious about drug marketing applications from Ranbaxy after the
US drug regulator blocked the sale of more than 30 generic
medicines made in two factories by the company. The stock had
declined 2.70% in the previous session.
India's largest aluminium producer Hindalco Industries fell 0.64%
at 109.20 after hitting a 52-week low of Rs 106.20 on BSE. The
company's Rs 5,050 crore rights share offering for subscription
Monday, 22 September 2008. The sale in a ratio of three shares for
every seven held at Rs 96 a share will close on 10 October 2008.
The company aims to use the funds to repay a bridge loan it had
taken to buy Canada's Novelis in 2007.
Realty shares tumbled. DLF (down 5.35% at Rs 398.40), Indiabulls
Real Estate (down 4.82% at Rs 214.25), Housing Development &
Infrastructure (down 4.04% at Rs 213.90), and Unitech (down 3.07%
at Rs 124.55), slipped. The BSE Realty index was down 3.35% at
3,958.45.
Banking shares languished in neagtive terrain. ICICI Bank (down
3.46% at Rs 612.50), State Bank of India (down 3.11% at Rs 1,518),
and HDFC Bank (down 1.27% at Rs 1,281.15), tumbled. The BSE Bankex
was down 2.58% at 6,919.19.
Among the side counters, Deccan Chronicle Holdings (down 10% at Rs
105.50), Sintex Industries (down 7.21% at Rs 285.15), Rolta
Industries (down 6.99% at Rs 267.95), and Pantaloon Retail India
(down 5.65% at Rs 286.50), tumbled.
lower in afternoon trade. The 30-share BSE Sensex was down 220.08
points. Index heavyweight Reliance Industries held firm in positive
territory, while Ranbaxy Laboratories slipped further. Selling was
also visible in the mid-cap and small-cap counters.
European markets opened lower. Key indices in UK, France and
Germany were down 0.56% to 1.41%. Asian markets, which opened
before Indian markets, were mixed. Key indices in China, Hong Kong
and Singapore were down by 1.56% to 3.34%. However, key indices in
Taiwan and South Korea were up by 1.17% to 1.44%. Japanese
financial markets were closed today for Autumnal Equinox Day, a
national holiday.
At 13:20 IST, the BSE 30-share Sensex was down 220.08 points or
1.57% to 13,774.88. The index shed 273.54 points at the day's low
of 13,721.42, hit in the onset of trading session. The Sensex fell
16.7 points at day's high of 13,978.26, hit in mid-morning.
The S&P CNX Nifty was down 50.35 points or 1.19% to 4172.70.
The BSE Mid-Cap index was down 1.23% at 5,156.67 and the BSE
Small-Cap index was down 0.86% at 6,140.93.
The market breadth was weak on BSE with 761 shares advancing as
compared to 1672 that declined. 65 shares remained unchanged.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) rose 1.32% at Rs 2063. The
stock came off session's low of Rs 2,000. Reliance Industries (RIL)
began production of crude oil at KG-D6 block of the Krishna
Godavari basin on 17 September 2008, the company said on 22
September 2008. RIL holds 90% participating interest in the block
while the balance is being held by Niko Resources.
India's largest drug maker by sales Ranbaxy Laboratories declined
10.74% at Rs 310 on reports the Canadian drug regulator, Health
Canada, issued a notice to Ranbaxy saying it will be particularly
cautious about drug marketing applications from Ranbaxy after the
US drug regulator blocked the sale of more than 30 generic
medicines made in two factories by the company. The stock had
declined 2.70% in the previous session.
India's largest aluminium producer Hindalco Industries fell 0.64%
at 109.20 after hitting a 52-week low of Rs 106.20 on BSE. The
company's Rs 5,050 crore rights share offering for subscription
Monday, 22 September 2008. The sale in a ratio of three shares for
every seven held at Rs 96 a share will close on 10 October 2008.
The company aims to use the funds to repay a bridge loan it had
taken to buy Canada's Novelis in 2007.
Realty shares tumbled. DLF (down 5.35% at Rs 398.40), Indiabulls
Real Estate (down 4.82% at Rs 214.25), Housing Development &
Infrastructure (down 4.04% at Rs 213.90), and Unitech (down 3.07%
at Rs 124.55), slipped. The BSE Realty index was down 3.35% at
3,958.45.
Banking shares languished in neagtive terrain. ICICI Bank (down
3.46% at Rs 612.50), State Bank of India (down 3.11% at Rs 1,518),
and HDFC Bank (down 1.27% at Rs 1,281.15), tumbled. The BSE Bankex
was down 2.58% at 6,919.19.
Among the side counters, Deccan Chronicle Holdings (down 10% at Rs
105.50), Sintex Industries (down 7.21% at Rs 285.15), Rolta
Industries (down 6.99% at Rs 267.95), and Pantaloon Retail India
(down 5.65% at Rs 286.50), tumbled.
Bailout debate mulls making Wall Street pay
NEW YORK (Reuters) - The planned $700 billion bailout to shore up the battered U.S. financial system looked set to drag into next week as Washington lawmakers haggled over how exactly they could make Wall Street pay for its rescue.
Stocks and the U.S. dollar tumbled on Monday as emerging details of the plan left many players skeptical that the rescue, which would give powers to the U.S. Treasury Department to buy up toxic mortgage-related debt from financial groups, would work.
"The big detail we want to know is how is the government going to buy these securities, and what they will pay, how that reverse auction will work," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois. "And the big question is, 'Will this bring us out of the woods?"'
A day after America's last two big investment banks, Goldman Sachs (NYSE:GS - News) and Morgan Stanley (NYSE:MS - News), ended Wall Street's swashbuckling era by securing Federal Reserve approval to become commercial banks, all eyes shifted to Washington.
U.S. lawmakers and Bush administration officials were hammering out details of a deal they hope will end the worst U.S. financial crisis since the Great Depression.
U.S. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke start two-days of congressional hearings on Tuesday to hasten approval of the bailout.
With the economy the No. 1 issue in a U.S. presidential election that is about six weeks away, lawmakers want a plan in place quickly, fearing delay could send markets reeling again.
But with one-third of the U.S. Senate and the entire U.S. House of Representatives up for re-election on November 4, lawmakers will want to sound tough on such hot-button issues as the pay of reckless executives.
"We are not sending a blank check to Wall Street," House Speaker Nancy Pelosi said after holding bipartisan talks.
With so many ideas being floated in Washington on Monday, one congressional aide who asked not to be identified likened the scene to a "Turkish bazaar of public policy ideas."
The crisis has unsettled world markets, and Group of Seven finance ministers and central bank heads promised "heightened close cooperation" to safeguard the global economy.
The latest jitters came after the deal late Sunday scrapped the investment bank model synonymous with Wall Street, ensuring Goldman Sachs Group Inc and Morgan Stanley will avoid the fate of rivals that collapsed or were bought in the brutal meltdown of recent weeks.
Morgan Stanley went a step further, striking a deal with Japan's largest bank, Mitsubishi UFJ Financial Group Inc (Tokyo:8306.T - News), on Monday to spend as much as $8.5 billion for about one-fifth of the prestigious 73-year-old investment bank, sending Morgan's shares higher before closing down.
ANGER AT BAILOUT
After Monday's talks, U.S. Rep. Barney Frank, a top Democrat, said the U.S. government would take equity in the companies seeking a bailout. But the U.S. Treasury is against that idea, sources close to Treasury told Reuters.
The White House said it agreed to an oversight board to monitor the bailout, which Democrats had pushed for. And Frank said there was also agreement that the plan should minimize the number of Americans who will lose their homes to foreclosure.
But lawmakers and Treasury officials were at odds on the emotional issue of whether executives at the companies in need of rescue must agree to limits to their compensation.
With details still in dispute, Frank said the legislation could take until next week to complete.
Earlier, U.S. President George W. Bush said, "Failure to act would have broad consequences far beyond Wall Street."
But U.S. Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform, voiced outrage at the notion of any bailout without a cap on executive pay.
"The (Bush) administration's plan ... would enrich the Wall Street executives whose reckless investments caused the financial crisis," the powerful California Democrat said. "The taxpayer is being asked to risk billions to protect the bonuses of investment bankers."
Even some Republicans came out against the bailout.
Alabama Sen. Richard Shelby, the top Republican on the Senate Banking Committee, said he feared the bailout was "neither workable nor comprehensive."
"It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted," he said.
Sen. Chuck Hagel, a Nebraska Republican, told Reuters after a meeting of fellow Senate Banking Committee members, "I suspect there will be opposition. We're not there. We don't even have a product yet."
South Carolina Republican Sen. Jim DeMint called the Bush plan "completely unacceptable."
The uncertainty caused stocks to lose most of the gains seen on Friday, when word of the plan sparked Wall Street's best one-day gain since 1987. The S&P 500 index (^SPX - News) dropped 3.8 percent.
Buoyed by the dollar's near 2 percent decline, U.S. crude oil futures soared $16.37 to settle at $120.92, the biggest ever jump in a trading session. At one point, oil was up a stunning $25.45, or 24.3 percent.
In a crisis that has lurched from issue to issue since the U.S. economy first showed weakness and home prices began to tumble last year, prompting a credit crunch and the collapse of investment banking, some wondered where it would end.
"The thing that scares me is the breadth of it," said Robert MacMahon, managing director for restructuring at GE (NYSE:GE - News) Corporate Lending.
Democrats, who control both chambers of Congress, pushed for changes to the plan on concerns that it could expand the powers of the executive branch without adequate oversight -- a frequent Democratic criticism of the Bush administration.
GLOBAL CRISIS
The crisis is threatening global markets. Central banks from Europe to Japan sought to shore up banks by injecting money into the banking system. (ID:nLM163631). Even in the oil-rich Gulf region, the crisis was felt.
The United Arab Emirates Central Bank launched its first-ever emergency funding facility to help fund banks as global lending between institutions shriveled.
The Fed's agreement to convert the once high-flying Goldman and Morgan Stanley investment banks into more conventional depositary institutions was Washington's latest effort to restore calm to chaotic markets and avoid a deep recession.
Both Goldman and Morgan will now face a thicket of new regulations, which will bolster their resources but also curb the spectacular profit growth that made investment bankers among the highest paid in the nation.
The rescue came together after seismic shifts on Wall Street that saw Lehman Brothers Holdings Inc (Other OTC:LEHMQ.PK - News) file for bankruptcy, Merrill Lynch & Co Inc (NYSE:MER - News) agree to sell itself to Bank of America (NYSE:BAC - News), and the Fed stage an $85 billion rescue of American International Group Inc (NYSE:AIG - News).
AIG shares gained 23 percent on Monday on reports its investors were hatching a plan to prevent the insurer from falling into government ownership, by repaying the Fed's loan.
Goldman and Morgan Stanley were the last of the big five investment banks that shaped 20 years of Wall Street history after Bear Stearns collapsed earlier this year.
Stocks and the U.S. dollar tumbled on Monday as emerging details of the plan left many players skeptical that the rescue, which would give powers to the U.S. Treasury Department to buy up toxic mortgage-related debt from financial groups, would work.
"The big detail we want to know is how is the government going to buy these securities, and what they will pay, how that reverse auction will work," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois. "And the big question is, 'Will this bring us out of the woods?"'
A day after America's last two big investment banks, Goldman Sachs (NYSE:GS - News) and Morgan Stanley (NYSE:MS - News), ended Wall Street's swashbuckling era by securing Federal Reserve approval to become commercial banks, all eyes shifted to Washington.
U.S. lawmakers and Bush administration officials were hammering out details of a deal they hope will end the worst U.S. financial crisis since the Great Depression.
U.S. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke start two-days of congressional hearings on Tuesday to hasten approval of the bailout.
With the economy the No. 1 issue in a U.S. presidential election that is about six weeks away, lawmakers want a plan in place quickly, fearing delay could send markets reeling again.
But with one-third of the U.S. Senate and the entire U.S. House of Representatives up for re-election on November 4, lawmakers will want to sound tough on such hot-button issues as the pay of reckless executives.
"We are not sending a blank check to Wall Street," House Speaker Nancy Pelosi said after holding bipartisan talks.
With so many ideas being floated in Washington on Monday, one congressional aide who asked not to be identified likened the scene to a "Turkish bazaar of public policy ideas."
The crisis has unsettled world markets, and Group of Seven finance ministers and central bank heads promised "heightened close cooperation" to safeguard the global economy.
The latest jitters came after the deal late Sunday scrapped the investment bank model synonymous with Wall Street, ensuring Goldman Sachs Group Inc and Morgan Stanley will avoid the fate of rivals that collapsed or were bought in the brutal meltdown of recent weeks.
Morgan Stanley went a step further, striking a deal with Japan's largest bank, Mitsubishi UFJ Financial Group Inc (Tokyo:8306.T - News), on Monday to spend as much as $8.5 billion for about one-fifth of the prestigious 73-year-old investment bank, sending Morgan's shares higher before closing down.
ANGER AT BAILOUT
After Monday's talks, U.S. Rep. Barney Frank, a top Democrat, said the U.S. government would take equity in the companies seeking a bailout. But the U.S. Treasury is against that idea, sources close to Treasury told Reuters.
The White House said it agreed to an oversight board to monitor the bailout, which Democrats had pushed for. And Frank said there was also agreement that the plan should minimize the number of Americans who will lose their homes to foreclosure.
But lawmakers and Treasury officials were at odds on the emotional issue of whether executives at the companies in need of rescue must agree to limits to their compensation.
With details still in dispute, Frank said the legislation could take until next week to complete.
Earlier, U.S. President George W. Bush said, "Failure to act would have broad consequences far beyond Wall Street."
But U.S. Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform, voiced outrage at the notion of any bailout without a cap on executive pay.
"The (Bush) administration's plan ... would enrich the Wall Street executives whose reckless investments caused the financial crisis," the powerful California Democrat said. "The taxpayer is being asked to risk billions to protect the bonuses of investment bankers."
Even some Republicans came out against the bailout.
Alabama Sen. Richard Shelby, the top Republican on the Senate Banking Committee, said he feared the bailout was "neither workable nor comprehensive."
"It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted," he said.
Sen. Chuck Hagel, a Nebraska Republican, told Reuters after a meeting of fellow Senate Banking Committee members, "I suspect there will be opposition. We're not there. We don't even have a product yet."
South Carolina Republican Sen. Jim DeMint called the Bush plan "completely unacceptable."
The uncertainty caused stocks to lose most of the gains seen on Friday, when word of the plan sparked Wall Street's best one-day gain since 1987. The S&P 500 index (^SPX - News) dropped 3.8 percent.
Buoyed by the dollar's near 2 percent decline, U.S. crude oil futures soared $16.37 to settle at $120.92, the biggest ever jump in a trading session. At one point, oil was up a stunning $25.45, or 24.3 percent.
In a crisis that has lurched from issue to issue since the U.S. economy first showed weakness and home prices began to tumble last year, prompting a credit crunch and the collapse of investment banking, some wondered where it would end.
"The thing that scares me is the breadth of it," said Robert MacMahon, managing director for restructuring at GE (NYSE:GE - News) Corporate Lending.
Democrats, who control both chambers of Congress, pushed for changes to the plan on concerns that it could expand the powers of the executive branch without adequate oversight -- a frequent Democratic criticism of the Bush administration.
GLOBAL CRISIS
The crisis is threatening global markets. Central banks from Europe to Japan sought to shore up banks by injecting money into the banking system. (ID:nLM163631). Even in the oil-rich Gulf region, the crisis was felt.
The United Arab Emirates Central Bank launched its first-ever emergency funding facility to help fund banks as global lending between institutions shriveled.
The Fed's agreement to convert the once high-flying Goldman and Morgan Stanley investment banks into more conventional depositary institutions was Washington's latest effort to restore calm to chaotic markets and avoid a deep recession.
Both Goldman and Morgan will now face a thicket of new regulations, which will bolster their resources but also curb the spectacular profit growth that made investment bankers among the highest paid in the nation.
The rescue came together after seismic shifts on Wall Street that saw Lehman Brothers Holdings Inc (Other OTC:LEHMQ.PK - News) file for bankruptcy, Merrill Lynch & Co Inc (NYSE:MER - News) agree to sell itself to Bank of America (NYSE:BAC - News), and the Fed stage an $85 billion rescue of American International Group Inc (NYSE:AIG - News).
AIG shares gained 23 percent on Monday on reports its investors were hatching a plan to prevent the insurer from falling into government ownership, by repaying the Fed's loan.
Goldman and Morgan Stanley were the last of the big five investment banks that shaped 20 years of Wall Street history after Bear Stearns collapsed earlier this year.
Friday, September 19, 2008
Europe's Stoxx 600, FTSE 100 Surge Most on Record; Banks Gain
Sept. 19 (Bloomberg) -- European stocks surged, sending the Dow Jones Stoxx 600 Index and the FTSE 100 to their biggest gains on record, after the U.S. government announced plans to halt the credit-market seizure and regulators cracked down on short sellers.
UBS AG, the European bank hardest hit by the subprime crisis, climbed 32 percent after U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke proposed removing troubled assets from the balance sheets of financial companies. Barclays Plc advanced 29 percent as the U.K.'s Financial Services Authority banned speculators from betting against financial shares until Jan. 16.
The Stoxx 600 rose the most since data for the index began in 1987, adding 8.3 percent to 278 at 4:37 p.m. in London, led by a rally in banks, insurers and basic resource companies. The FTSE 100 posted a record advance of 9.3 percent, while Russia's RTS Index jumped 22 percent after a two-day suspension and President Dmitry Medvedev's pledge of $20 billion to prop up the market.
``At the start of the week, equity investors weren't just facing a loss but an absolute loss,'' said Gary Dugan, London- based chief investment officer for Europe at Merrill Lynch Global Wealth Management, which oversees $2 trillion. ``Now what they are saying is every financial institution is virtually underwritten by this proposal to drop those assets into a life boat.''
Lehman, AIG
The Stoxx 600 still lost 0.9 percent this week after Lehman Brothers Holdings Inc. filed for bankruptcy, the U.S. government seized control of American International Group Inc. and Merrill Lynch & Co. was forced to sell itself to Bank of America Corp. More than $500 billion in credit losses and writedowns at banks have pushed the global economy toward a recession.
U.S. Treasuries and European government bonds fell today on speculation Paulson and Bernanke's plan will increase demand for stocks over bonds. The Treasury also announced a $50 billion program to insure the holdings of money-market mutual funds for a year.
The dollar rose the most in more than five months against the yen, while the cost of default protection on corporate bonds dropped by the most since the bailout of Bear Stearns Cos. in March.
National benchmark indexes climbed in all 18 western European markets. Germany's DAX jumped 5.6 percent while France's CAC 40 rose 9.3 percent, the most on record.
`Arms Around'
``This resolution will get its arms around the entire financial sector and allow them to no longer be an anchor on the rest of the economy,'' said Neil Dwane, chief investment officer for Europe at Allianz Global Investors' RCM unit, where he helps oversee $65 billion. ``For sentiment the worst could be over for financials.''
UBS added 32 percent to 21 francs. Deutsche Bank AG, Germany's largest bank, jumped 14 percent to 57.50 euros, while Credit Suisse Group, Switzerland's second-biggest bank, climbed 19 percent to 56 francs.
HBOS Plc gained 29 percent to 222.5 pence, trimming its weekly decline to 21 percent. Barclays rose 29 percent to 389 pence, leaving it with a 11 percent gain for the week. Lloyd's TSB Group Plc, the U.K.'s biggest provider of checking accounts, advanced 20 percent to 285.75 pence.
The U.K. Financial Services Authority said today its ban on short selling of financial shares will apply to 29 companies including HBOS and Barclays.
Irish Shorts
Ireland's financial regulator also banned short selling of the country's banking stocks to ``ensure the orderly conduct of the market,'' following the move by its U.K. counterpart. Bank of Ireland Plc gained 39 percent to 5.27 euros amid speculation Spain's Banco Santander SA may bid for the country's second biggest bank.
The Irish lender said today it has not received an approach or entered into discussions with Banco Santander or any other party.
Volkswagen AG was one of just 27 stocks in the Stoxx 600 to fall today. Europe's largest carmaker dropped 14 percent to 262 euros as investors decided recent gains were overdone following a 47 percent surge in the past three days.
Christian Aust, an analyst with Munich-based Unicredit, said the ``irrational levels'' that Volkswagen stock reached this week, amid a rally that included short-sellers unwinding positions in the wake of the bankruptcy of Lehman Brothers, couldn't be sustained
UBS AG, the European bank hardest hit by the subprime crisis, climbed 32 percent after U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke proposed removing troubled assets from the balance sheets of financial companies. Barclays Plc advanced 29 percent as the U.K.'s Financial Services Authority banned speculators from betting against financial shares until Jan. 16.
The Stoxx 600 rose the most since data for the index began in 1987, adding 8.3 percent to 278 at 4:37 p.m. in London, led by a rally in banks, insurers and basic resource companies. The FTSE 100 posted a record advance of 9.3 percent, while Russia's RTS Index jumped 22 percent after a two-day suspension and President Dmitry Medvedev's pledge of $20 billion to prop up the market.
``At the start of the week, equity investors weren't just facing a loss but an absolute loss,'' said Gary Dugan, London- based chief investment officer for Europe at Merrill Lynch Global Wealth Management, which oversees $2 trillion. ``Now what they are saying is every financial institution is virtually underwritten by this proposal to drop those assets into a life boat.''
Lehman, AIG
The Stoxx 600 still lost 0.9 percent this week after Lehman Brothers Holdings Inc. filed for bankruptcy, the U.S. government seized control of American International Group Inc. and Merrill Lynch & Co. was forced to sell itself to Bank of America Corp. More than $500 billion in credit losses and writedowns at banks have pushed the global economy toward a recession.
U.S. Treasuries and European government bonds fell today on speculation Paulson and Bernanke's plan will increase demand for stocks over bonds. The Treasury also announced a $50 billion program to insure the holdings of money-market mutual funds for a year.
The dollar rose the most in more than five months against the yen, while the cost of default protection on corporate bonds dropped by the most since the bailout of Bear Stearns Cos. in March.
National benchmark indexes climbed in all 18 western European markets. Germany's DAX jumped 5.6 percent while France's CAC 40 rose 9.3 percent, the most on record.
`Arms Around'
``This resolution will get its arms around the entire financial sector and allow them to no longer be an anchor on the rest of the economy,'' said Neil Dwane, chief investment officer for Europe at Allianz Global Investors' RCM unit, where he helps oversee $65 billion. ``For sentiment the worst could be over for financials.''
UBS added 32 percent to 21 francs. Deutsche Bank AG, Germany's largest bank, jumped 14 percent to 57.50 euros, while Credit Suisse Group, Switzerland's second-biggest bank, climbed 19 percent to 56 francs.
HBOS Plc gained 29 percent to 222.5 pence, trimming its weekly decline to 21 percent. Barclays rose 29 percent to 389 pence, leaving it with a 11 percent gain for the week. Lloyd's TSB Group Plc, the U.K.'s biggest provider of checking accounts, advanced 20 percent to 285.75 pence.
The U.K. Financial Services Authority said today its ban on short selling of financial shares will apply to 29 companies including HBOS and Barclays.
Irish Shorts
Ireland's financial regulator also banned short selling of the country's banking stocks to ``ensure the orderly conduct of the market,'' following the move by its U.K. counterpart. Bank of Ireland Plc gained 39 percent to 5.27 euros amid speculation Spain's Banco Santander SA may bid for the country's second biggest bank.
The Irish lender said today it has not received an approach or entered into discussions with Banco Santander or any other party.
Volkswagen AG was one of just 27 stocks in the Stoxx 600 to fall today. Europe's largest carmaker dropped 14 percent to 262 euros as investors decided recent gains were overdone following a 47 percent surge in the past three days.
Christian Aust, an analyst with Munich-based Unicredit, said the ``irrational levels'' that Volkswagen stock reached this week, amid a rally that included short-sellers unwinding positions in the wake of the bankruptcy of Lehman Brothers, couldn't be sustained
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