World Stock Markets Soar After Last Week's Rout

The All Ordinaries Index is shown at the Australian Stock Exchange at Sydney, Monday, Oct. 13, 2008....

The All Ordinaries Index is shown at the Australian Stock Exchange at Sydney, Monday, Oct. 13, 2008. The Australian share market rebounded strongly in the first 20 minutes of trading with the All Ordinaries index gaining 5 percent in response to a government announcement that it would guarantee all bank and other lender deposits for three years. (AP Photo/Rick Rycroft)

(AP)

Global stock markets rebounded strongly on Monday after last week's historic sell-off as governments from Europe to Australia and the U.S. intensified efforts to ease a financial crisis that threatened to the throw the world into recession.

Hong Kong's Hang Seng Index, which tumbled more than 7 percent Friday, soared 1,434.33 points, or 9.69 percent, to finish at 16,231.20.

Australian and Singapore indices jumped more than 5 percent, while South Korean and Chinese benchmarks added around 3.7 percent.

As markets opened in Europe, Britain's FTSE-100 shot up 5.6 percent, Germany's DAX climbed 6.4 percent and France's CAC-40 advanced 7 percent.

In Japan, where the Nikkei 225 tanked nearly 10 percent Friday to close out its worst week in history, trading was closed for a public holiday.

Markets around the world sprung to life as nations expanded their efforts to save a financial system, reeling from seizing credit markets and risky debt, that threatened to throw the global economy into recession.

On Monday five central banks — including the U.S. Federal Reserve and the European Central Bank — unveiled new measures to thaw frozen credit markets and bolster funding to banks. The Bank of England, the European Central Bank and the Swiss National Bank said they would provide unlimited U.S. dollar funds to financial institutions. The Bank of Japan said it was considering similar measures.

In Britain, three of the country's largest banks — Royal Bank of Scotland Group PLC, Lloyds TSB Group PLC and HBOS PLC — announced plans to take up to 37 billion pounds (US$63 billion) of government money to boost their balance sheets.

Earlier in the day, Australia said it would guarantee bank and other lender deposits for three years.

The moves came after leaders of the 15 euro-zone countries said Sunday they would guarantee new bank debt until the end of 2009, allow governments to help banks by buying preferred shares, and vowed to rescue important failing banks through emergency recapitalizion.