Global stock markets surge on US bank rescue plan

NEW YORK (AFP) - Global markets surged Friday as President George W. Bush said he was ready to “risk” hundreds of billions of dollars to beat the financial crisis.

With a top US senator estimating that one trillion dollars may be needed to soak up the debt that killed off Lehman Brothers and brought other Wall Street icons to their knees, central banks around the world again spent massively to steady the groggy markets.

But Morgan Stanley still looked to be on the way to a forced marriage, and analysts differed over whether the turmoil had peaked.

US stocks soared another 3.47 percent after a 3.5 percent gain Thursday when Bush announced that the US government would take drastic action to tackle the bad debts at the heart of the crisis.

London’s FTSE 100 index was up more than nine percent, Paris added 7.54 percent and Frankfurt put on more than five percent. Hong Kong shares closed up 9.6 percent and Tokyo closed up 3.76 percent.

The dollar rose, oil went above 100 dollars a barrel and money came out of safe haven gold investments as Bush on Friday reaffirmed the US administration’s determination to tackle the crisis while warning that success was not guaranteed.

“This is a pivotal moment for America’s economy,” Bush said. “There will be ample opportunity to debate the origins of this problem. Now is the time to solve it.”

“These measures will require us to put a significant amount of taxpayer dollars on the line,” he said. “This action does entail risk.”

But, he declared, “we expect that this money will eventually be paid back.”