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European shares jump, led by banks, energy stocks

Banks gain on coordinated govt measures.

LONDON - European shares jumped yesterday to add to a record percentage rise a day earlier, with investors scooping up energy and bank stocks after measures by governments to end the worst financial crisis since the Great Depression.By 1116 GMT, the pan-European FTSEurofirst 300 index was up 5.5 percent at 988.79 points, adding to a more than 10 percent rally on Monday.Banking stocks were among the top-weighted gainers on the index, while commodity shares also advanced, helped by improved market sentiment and a jump in crude and metals prices.Barclays surged 12.5 percent, UBS added 9 percent, and Standard Chartered and Societe Generale both rose 8.6 percent.

Oil rises more than USD 3 on banks rescue

Oil rose more than USD 3 yesterday , extending the previous session's 4 percent gain, as investors' confidence over government moves to shore up banks offset expectations of a global recession. U.S crude gained USD 3.11 to USD 84.30 a barrel by 1000 GMT, just off a session high of USD 84.53, as concerns over the impact of the financial crisis on oil demand eased. London Brent crude rose USD 2.60 to USD80.06.

ECB allots EUR 310 BLN in fixed rate refi

Over 600 banks took advantage of the European Central Bank's new funding rules on Tuesday as they borrowed 310.41 billion euros (USD 422.7 BLN) at the first weekly auction of euro funds at a base rate-tied fixed rate of 3.75 percent. A total of 604 banks bid for a total of EUR 310.42 BLN. More than 1,700 banks are eligible to tap the central bank for funds meaning over one third of all eligible banks took part. "I'm not surprised by this result. They've said they would do whatever it takes to provide funds," said one London trader, adding that future auctions could also see robust demand.

Iceland shares plunge, officials seek Russian help

Iceland's blue chip stocks plunged 77 percent when trading reopened on Tuesday after a near week-long suspension and an official delegation from the island sought Russian help in saving the economy from collapse.Iceland has already tapped the International Monetary Fund for help with the crisis that has overwhelmed its once buoyant financial sector and brought the economy close to collapse.

Iceland last week took control of the operations of Kaupthing, Landsbanki and Glitnir and has been forced to take abandon attempts to defend its free-falling currency.Icelandic officials held talks with Russian Finance Ministry officials on Tuesday.

Russia's Finance Ministry said Iceland would lay out its wishes at the first round of talks. If agreement is reached more negotiations are likely to follow, at a higher level.

On Monday, an IMF official who asked not to be identified, told Reuters the fund's executive board discussed Iceland's official request for finance at the weekend but that no amount had been agreed. An Icelandic government spokeswoman said she could not confirm that an official request had been made. Moscow has already unveiled a rescue package for the Russian market worth over USD 210 BLN, but analysts say capital flight may not stop until global financial markets stabilise. Helping Iceland could be a small way of making that happen, though Russia's move is widely seen as politically motivated.

 

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Tags: banks percent iceland stocks shares european blue euro