Strong gains follow bank recapitalisation announcement
Published: 13 October 2008
By MoneyhighStreet Staff Leave a Comment
Updated: 30 November -0001
The FTSE 100 surged today, as the markets reacted to the government''s bank bailout plan.
In a statement timed for release before the opening of the exchanges this morning, the treasury confirmed that it would be purchasing equity stakes in financial firms.
Around £20 billion of public money is to be used to buy 60 per cent of RBS, with a further £17 billion spent on over 40 per cent of HBOS/Lloyds.
The announcement of the G7 finance ministers that they would look to recapitalise banks, along with more concrete guarantees of savings deposits, also appears to have buoyed investors.
At the close, the FTSE was up 281 points, or 7.1 per cent, to 4212.88.
Earlier, the Hang Seng had finished over nine per cent up on the day.
As of 16:36 BST, the Dow Jones was also performing strongly, up 514 points or 6.1 per cent.
"Market sentiment is a bit more positive, the government has grasped the nettle and committed to a rescue plan," Keith Bowman, equity strategist at Hargreaves Lansdown, told Reuters.