Shares in European stock markets have fluctuated wildly in mid-morning trade as investors hope that US lawmakers would eventually agree on a billion-dollar rescue package to shore up financial markets.
European shares reversed steep early losses to turn positive in early Tuesday trade as investors bet that a rejected U.S. financial sector bailout package would eventually go through.
At 0815 GMT, the FTSEurofirst 300 index of top European shares was up 0.1 percent at 1,048.54 points as banks pared early losses and miners performed strongly on firm gold prices.
Among financials, ING gained 4.8 percent, Standard Chartered and HSBC rose 0.8 percent.
Rio Tinto led miners higher with a 4.3 percent rise.
U.S. lawmakers rejected the $700 billion bailout package on Monday, sending Wall Street into a tailspin.
"No one really expected a no vote, but it's encouraging that they're clearly going to vote on this again. Bush and Paulson will use their political might to twist people's arms. If you call heads or tails and lose, you toss the coin again," said an equities trader.
"Some people are also seeing the Irish government stepping in as a sign that more governments will get involved. We're coming off oversold positions but people will sell in any rally," he said.
Anglo Irish Bank jumped 21.7 percent and Allied Irish Banks gained 11 percent after the Irish government announced it would guarantee all deposits for two years to maintain financial stability.
"There is a decent chance that European Central Banks (ECB, BoE, SNB, Riksbank and the Danish Central Bank) will make emergency easing soon, perhaps this week, especially if the U.S. Fed is also ready to cut again," Citigroup said in a note.
Date created : 2008-09-30