World markets boosted by Eurozone agreement

City A.M. Reporter
THE $1 trillion global emergency package to stabilise the euro unleashed a spectacular rally in world stocks yesterday but analysts said EU leaders had only bought time to tackle deep-seated fiscal problems.

The “shock and awe” rescue plan – the biggest since G20 leaders threw money at the global economy following the collapse of Lehman Brothers in 2008 – triggered the biggest one-day rise in European shares in 17 months after panic selling last week.

Wall Street also surged as confidence returned, at least temporarily. The Dow Jones Industrial average jumped 3.63 per cent before closing at 10,785.14, the FTSE 100 Index climbed 5.16 per cent, the Dax 5.3 per cent, the CAC 40 9.66 per cent.

The euro rallied after global policymakers announced the loan plan.

The euro soared above $1.30, rebounding from a 14-month low near $1.25 hit last week as markets feared a debt crisis in Greece would spread to other euro zone countries, including Spain and Portugal. US and European stocks also rallied.

But concerns lingered, including questions about how quickly aid could be disbursed, and that knocked the currency back to around $1.28.