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World markets surge on US bank assets plan

 A man on a bicycle goes by a Tokyo brokerage's electric signboard indicating Japanese stock recovered the 81, 000 level in Tokyo, Monday morning, Mar...
 Pedestrians are reflected on a Tokyo brokerage's electric signboard indicating Japanese stock prices in Tokyo, Monday morning, March 23, 2009. The be...

Japan Markets

A man on a bicycle goes by a Tokyo brokerage's electric signboard indicating Japanese stock recovered the 81, 000 level in Tokyo, Monday morning, Mar...

Japan Markets

Pedestrians are reflected on a Tokyo brokerage's electric signboard indicating Japanese stock prices in Tokyo, Monday morning, March 23, 2009. The be...

World stock markets soared Monday as the Obama administration announced a plan to help banks purge as much as $1 trillion in bad assets from their books.
U.S. Treasury Secretary Timothy Geithner's banking plan will use low-interest loans and between $75 billion to $100 billion of what's left of the government's $700 billion bailout fund to entice private sector investors to initially buy about $500 billion in toxic assets _ taking them off the books of the nation's banks.
The administration also said the initial effort could grow to $1 trillion, if the program proves successful in attacking the problem that has stifled bank lending to consumers and business, compounding the effects of the global downturn.
"Simply hoping for banks to work these assets off over time risks prolonging the crisis," U.S. Treasury Secretary Timothy Geithner wrote in an opinion piece in Monday's Wall Street Journal.
In European afternoon trading, Britain's FTSE 100 climbed 0.8 percent to 3,874.13, Germany's DAX jumped 1.2 percent to 4,115.57, and France's CAC 40 advanced 1 percent to 2,818.63.
Wall Street opened sharply higher. The Dow Jones Industrial Average rose 2.3 percent to 7,445.64, the Standard & Poor's 500 index grew 2.5 percent to 787.55, and the Nasdaq 100 composite index added 2.1 percent to 1,487.56.
In Asia earlier, stocks rose ahead of Geithner's announcement, with Hong Kong jumping 4.8 percent and Japan's benchmark hitting a two-month high after the country's finance minister said aggressive public spending to the tune of 20 trillion yen ($208 billion) might be needed to end the country's painful recession.
Worldwide, investors were largely cheered by the Obama administration's latest effort to heal the hard-hit financial sector and restore bank and consumer lending. The administration said it expects participation from a broad array of private sources, ranging from pension funds to insurance companies and other long-term investors.
"The markets are still digesting the detail and I think that could be the case for the next few days at least," said Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers in London. He added that there had already been "a little more detail" in Monday's announcement, compared with Geithner's first effort to overhaul the banking rescue program on Feb. 10. On that day, investors, upset with a lack of specifics, sent markets tumbling. "Whether it will prove sufficient, it's too early to say," Bowman added.
In Europe, shares of Daimler AG were up 0.8 percent, after earlier rising 8.2 percent, following an announcement that Abu Dhabi-based Aabar Investments PJSC will buy a stake in the German automaker and become its biggest shareholder. Aabar's biggest shareholder is the International Petroleum Investment Co., owned by the Abu Dhabi government.
In Asia, news of the bailout helped re-energize a global rally that started two weeks ago on signs of improvement in the financial system.
"It's becoming difficult to remain bearish," said Desmond Tjiang, chief investment officer, who helps manage $3 billion in Asian equities at Fortis Investment Management in Hong Kong. "The governments have definitely helped ... and people are still hoping for a second-half recovery."
Tokyo's Nikkei 225 stock average surged 3.4 percent to 8,215.53 as a weaker yen also boosted sentiment. Hong Kong's Hang Seng jumped 4.8 percent to 13,447.42, and South Korea's Kospi climbed 2.4 percent to 1,199.50.
Elsewhere in Asia, Shanghai's key index added 2 percent to 2,325.48 on higher commodity prices. Australia's benchmark gained 2.4 percent, while India's Sensex climbed 5.1 percent to 9,424.02.
Banks were especially strong across the region, with Japan's Sumitomo Mitsui Financial Group Inc. jumping 7.3 percent and Mizuho Financial Group Inc. up 5.3 percent. China Construction Bank surged 7 percent in Hong Kong.
Higher oil and commodity prices lifted Australian mining giant BHP Billiton Ltd, which rose 3.5 percent. Benchmark crude for May delivery gained 13 cents at $52.20 a barrel in European trade.
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AP business writer Jeremiah Marquez in Hong Kong contributed to this report.


Updated : 2021-10-26 12:33 GMT+08:00