Banking shares have boosted stock markets after government intervention.
Shares have rallied following yesterday's coordinated rate cut from several central banks. Stock markets across Europe rose following a 0.5 percent cut to the Bank of England's base rate and similar changes in six other countries.
This coupled with the £50 billion part-nationalisation of the UK banking sector led to a 1.3 percent increase on the FTSE, a two percent rise on the French Cac 40 exchange and a 0.5 percent boost for Germany's Dax.
In the UK, banking shares were among the top risers. HBOS share prices were up 30 percent and the Royal Bank of Scotland noted a 15 percent rise.
"Banking shares have been the main beneficiaries of the UK's rescue plan, and the interest rate cuts," Richard Hunter, head of UK equities at Hargreaves explained to the BB.
"We've had a few false dawns over the past couple of months and it's too early to call a complete recovery, but there's hope that these measures will get some traction at some point," he added.
However, Japan's Nikkei reached a five-year low yesterday with the largest ever one-day fall since October 1987. The index was down 9.4 percent at close and lost 71.98 points during the first five minutes of trading this morning.
Prime minister Taro Aso reacted by pledging additional funding for the country's economic stimulus plan.
