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Shares climb after intervention Shares rally after intervention
(about 1 hour later)
Most European and Asian shares have moved ahead as investors absorbed news of a co-ordinated interest rate cut. Most European and Asian shares have rallied after investors absorbed news of a co-ordinated interest rate cut.
Banking shares helped push the UK's FTSE 100 index 3% higher in early trade, while France's Cac-40 rose 2.9%. and Germany's Dax-30 added 2.4%. Banking shares helped to push the UK's FTSE 100 index 1.3% higher by late morning while France's Cac 40 rose 2% and Germany's Dax added 0.5%.
Positive reaction to the UK bank rescue package boosted shares in HBOS by 32%, while Royal Bank of Scotland added 18%. But Japan's Nikkei index closed lower after its prime minister urged more action to boost the country's economy. The UK bank rescue package boosted financial shares, with HBOS up 30% and Royal Bank of Scotland adding 15%.
The measures proposed by Taro Aso would be on top of a 2 trillion yen ($19.5bn; £11.5bn) stimulus plan already proposed. But Japan's Nikkei index closed lower after its prime minister urged more action to boost the country's economy.
Turbulent week The measures proposed by Taro Aso would be on top of a 2 trillion yen ($19.5bn; £11.5bn) stimulus plan already put forward.
We've had a few false dawns over the past couple of months and it's too early to call a complete recovery, but there's hope that these measures will get some traction at some point Richard HunterHargreaves Lansdown stockbrokers Check UK bank shares
More guarantees
As the turbulent week continued, in other developments:
  • Crisis-hit Iceland suspended trading on its OMX Nordic Exchange until Monday, citing "unusual market conditions". It follows its largest bank, Kaupthing, becoming the third financial institution to be taken over by the country's government in the past week.
  • Ireland extended its guarantee of bank deposits to cover savings in Irish branches of five foreign-owned institutions Northern Ireland's Ulster Bank, British-owned First Active and HBOS, Belgium's IIB Bank and German-owned Postbank.
  • US Treasury Secretary Henry Paulson warned that some banks will still fail despite the $700bn (£406bn) rescue package to shore up the financial system.
  • Iceland's largest bank, Kaupthing, became the third financial institution to be taken over by the country's government in the past week.
  • Dexia shares jumped 25% after France, Belgium and Luxembourg announced they would provide state guarantees for its borrowings.
  • UK Chancellor Alistair Darling flew to the US to discuss the co-ordinated cutting of interest rates by six central banks.
  • After trading on Russian stock markets had been suspended following sharp share falls earlier this week, they were again halted - this time after stocks climbed too high after trade resumed.
'False dawns'
Seven central banks on Wednesday cut interest rates in an effort to steady the faltering global economy.Seven central banks on Wednesday cut interest rates in an effort to steady the faltering global economy.
It came after the UK government's announcement of a package of measures aimed at rescuing the banking system. This package makes available £400bn ($692bn) of fresh money. It came after the UK government's announcement of a package of measures aimed at rescuing the banking system.
As the turbulent week continued, in other developments:
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  • US Treasury Secretary Henry Paulson warned that some banks will still fail despite the $700bn (£406bn) rescue package to shore up the financial system.
  • Iceland's largest bank, Kaupthing, became the third financial institution to be taken over by the country's government in the past week.
  • Dexia shares jumped 25% after France, Belgium and Luxembourg announced they would provide state guarantees for its borrowings.
  • UK Chancellor Alistair Darling flew to the US to discuss the co-ordinated cutting of interest rates by six central banks.
This package makes available £400bn ($692bn) of fresh money.
Turbulent trade There was "an air of cautious optimism" that such measures would have some impact on the financial crisis, said Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers.
Russian stock markets climbed strongly - after re-opening following a suspension in trading on Wednesday. "Banking shares have been the main beneficiaries of the UK's rescue plan, and the interest rate cuts," he added.
The benchmark RTS index added 5.5% in early trading Micex index climbed 7%. "We've had a few false dawns over the past couple of months and it's too early to call a complete recovery, but there's hope that these measures will get some traction at some point."
FTSE 100 INDEX: 9 October 2008*All Times GMT
More rate cuts
Japan's benchmark Nikkei lost 0.5% or 45.83 points to close at 9,157.5.Japan's benchmark Nikkei lost 0.5% or 45.83 points to close at 9,157.5.
Shares had been ahead for most of trading after the Bank of Japan injected two trillion yen into the money markets in an effort to calm fears.Shares had been ahead for most of trading after the Bank of Japan injected two trillion yen into the money markets in an effort to calm fears.
But Mr Aso's call for further action prompted a sell-off.But Mr Aso's call for further action prompted a sell-off.
The Nikkei had suffered its biggest one-day drop in 21 years on Wednesday, with the index shedding nearly 10% of its value.The Nikkei had suffered its biggest one-day drop in 21 years on Wednesday, with the index shedding nearly 10% of its value.
In Sydney, Australia's main share index fell 1.8%, but Hong Kong's Hang Seng index added 3.3% after its central bank announced a half a percentage point cut to its interest rate, taking it to 2%.In Sydney, Australia's main share index fell 1.8%, but Hong Kong's Hang Seng index added 3.3% after its central bank announced a half a percentage point cut to its interest rate, taking it to 2%.
South Korea's stock market climbed after the central bank announced an interest rate cut of a quarter of a percentage point.South Korea's stock market climbed after the central bank announced an interest rate cut of a quarter of a percentage point.