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European stocks posts biggest rise on record

Shares on the BVB surge, on optimistic investors after days of collapse.

NEW YORK - European shares surged on Friday to their biggest one-day percentage gain on record, as battered banks and insurers gained thanks to temporary bans on short sales of financial stocks and the U.S. government's moves to end the credit crisis. The FTSEurofirst 300 index closed 8.2 percent higher at 1,150.78 points, recouping some of the sharp losses from earlier in the week and notching up the biggest one-day percentage gain on record, according to Thomson Reuters data. The benchmark has still fallen 0.9 percent in a rollercoaster week, and is down 23.6 percent so far in 2008.

The U.S. rescue plans and bans on both sides of the Atlantic to ban investments betting that financial stocks would go lower lifted leading European shares to their biggest gain ever and Britain's top index to its biggest daily rise in its 24-year history.

The Bush administration asked Congress on Saturday for USD 700 billion to bail out firms burdened with bad mortgage debt, seeking extraordinary authority as it

tackles the worst financial crisis since the Great Depression. Democratic lawmakers, who control both houses of Congress, said they hoped to approve the bailout quickly but wanted changes such as more oversight, limits on executive pay at participating firms, and assistance for homeowners. But even the conditions on the type of assets and the source of them could be waived by the Treasury secretary, in consultation with the chairman of the Federal Reserve, if necessary to stabilize markets, according to a statement issued late on Saturday by the Treasury.

To allow for the bailout, the U.S. government's debt limit would rise to USD 11.315 trillion from USD 10.615 trillion. The bailout plan follows a wrenching week that transformed Wall Street with Lehman Brothers' failure, the agreed sale of Merrill Lynch & Co and a government takeover of ailing insurer AIG. Egypt's main indexes ended sharply higher on Sunday, buoyed by sharp increases in heavyweight stocks after Wall Street bailout.

The debt plan was hatched amid grave concerns that other major banks could collapse and that credit markets were close to freezing, threatening the functioning of the U.S. economy. Showing more deals may still be in the works, Morgan Stanley's board was scheduled to meet on Saturday to consider a possible takeover by Wachovia Bank or selling a bigger stake to China Investment Corp., according to sources familiar with the

situation. Senior Bush administration officials have pressed their counterparts in Japan, Germany, Britain and other nations to establish similar rescue plans for their own troubled financial firms, The Washington Post reported in its Sunday editions.

Measures announced by American authorities to support bourses brought optimism back on the market and generated a wave of enthusiasm, followed by hikes in most stocks listed on the Bucharest Stock Exchange (BVB), which increased close to the maximum variation limit.

Liquidity climbed 27.8 percent to 59.02 million lei (16 million euros) from 46.19 million lei in the previous session.

"Investors are practically blocked by the trading system to introduce an order for a quotation which exceeds the 15 percent limit," BVB president Stere Farmache announced. The BET index of the ten best companies listed on the BVB climbed 9.25 percent to 4,667.62 and the BET-C composite index measuring all listed shares minus financial companies added 8.51 percent to 3,532.78.

The BET-FI index of the five financial companies known as SIFs jumped 14.53 percent to 28,089.66 and the ROTX index for trading blue-chips in Vienna hiked 9.66 percent to 11,643.50.

The BET-XT index of the 25 most liquid companies gained 10.02 percent to 491.35 and the BET-NG index of the ten power companies soared 11.16 percent to 681.87.

MEF prepares stock exchange support measures

Varujan Vosganian, Minister of Economy and Finances, said, on Friday, that they were preparing several measures meant to support Bucharest Stock Exchange, considering the turmoil in the international financial markets, which have resulted in strong share quotation drop, according to The Money Channel. Vosganian informed that he already had a meeting with PM and with the BVB board members in relation to this.

The measures to be adopted in support of the Stock Exchange will be released today or tomorrow. BVB president and director general, Stere Farmache, specified that MEF could apply both fiscal measures and economic measures to support the stock exchange, considering that important companies are still in its portfolio, which could be listed.

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