In early afternoon trading, the FTSE 100 index in London was up 4.86 percent and the CAC-40 added 6.1 percent in Paris. The DAX in Frankfurt rose 6.9 percent.
Trading in Standard & Poor’s 500 index futures suggested Wall Street stocks would gain as much as 6 percent at the opening. The bond market was closed Monday for the Columbus Day holiday reports the New York Times.
Deutsche Bank rose nearly 25 percent in Frankfurt, while BNP Paribas and other major French banks rose more than 6 percent.
Royal Bank of Scotland, which is raising billions of pounds worth of new equity with British government backing, rose more than 5 percent.
In Hong Kong, the Hang Seng index bounced 9.6 percent higher. The S&P/ASX 200 index in Sydney closed up 5.6 percent. Tokyo markets, which lost about a quarter of their value last week, were closed Monday for a national holiday.
In Moscow trading, the Micex index rose 4.5 percent.
“We’re extremely cautious,” Philippe Gijsels, senior equity strategist at Fortis Global Markets in Brussels, said. “This looks like the start of a typical bear-market rally.” He said measures Group of 7 countries announced over the weekend had helped banking stocks, but that the market had been due for a rally after major indexes posted some of their worst declines last week.
“To repair the market will take some time,” he said. “The problem is that the financial problem has now become a real economic problem. The damage has been done.”
“The G-7 was responding to a crisis of confidence,” David Thébault, head of derivative sales at Global Equities in Paris, said, comparing the new measures to “a defibrillator applied to a heart attack patient.” “We can see the end of the financial crisis, but at the price of an economic crisis,” he added. “But it’s better to have an economic crisis than to have the entire system endangered.”
Read more here: Global Markets Jump on Vows of New Capital