Aust stocks surge 5.7 per cent after European powers shore up banks
The Australian share market has surged 5.7 per cent after European leaders rushed out measures to support their banks and the federal government guaranteed bank deposits.
At 1015 AEST, the S&P/ASX200 was trading 5.63 per cent higher at 4,183.80.
The federal government said on Sunday it would guarantee all money deposits for the next three years, while Europe moved to guarantee new medium-term bank debt, inject capital into the banking sector and unfreeze commercial paper markets, giving companies vital access to funding and help stave off an economic slump.
The rebound in local stocks follows a horror session on Friday when the share market plunged 8.33 per cent to its lowest close since the stock market crash in 1987.
On Friday, The Dow Jones lost 128 points, or 1.49 per cent to 8451.19 while the Standard & Poor's 500 index fell 10.7 points, or 1.18 per cent, to 899.22.
The tech-heavy Nasdaq managed a slim gain of 4.39 points or 0.27 per cent, to 1,649.51.
Despite the Columbus Day public holiday in the US on Monday, the markets will remain open there.
The Australian share market closed more than eight per cent lower on Friday in a session that wiped $106 billion from the value of stocks.
The benchmark S&P/ASX200 index was down 360.2 points, or 8.34 per cent, at 3,960.7, while the broader All Ordinaries index fell 351.9 points, or 8.2 per cent, to 3,939.4 - its biggest fall since 1987 when it dropped almost 25 per cent.
