Frankfurt - The DAX index of the 30 top German shares clawed back much of last week's losses in early trade Monday, rising more than 3 per cent on news of a government bail-out for battered US mortgage lenders Fannie Mae and Freddie Mac.

Banking stocks led the way, with Deutsche Bank rising 8 per cent to above 61 euros (87 dollars).

All 30 shares benefited from the positive sentiment, with the smallest rise coming at software company SAP, which had risen 2 per cent after 10 am (0800 GMT).

Over the course of last week, the DAX fell 4.6 per cent to 6,127. By mid-morning Monday, the index stood at 6,334. (dpa)