US mortgage rescue plans buoys European shares

Frankfurt - The US Government's move to shore up two key mortgage lenders hit by America's subprime market crisis has helped to ease the pressure on European markets with shares opening up Monday.

After see-sawing their way through last week, European bourses reacted with relief to Washington's decision announced Sunday to throw Fannie Mae and Freddie Mac financial lifelines.

While Europe's blue-chip Stoxx 50 index had gained 1.0 per cent in late morning to trade at 2784 points, the dollar also managed to edge forward having lost ground last week in the face of renewed concerns about the US economic outlook.

By late morning trading, the dollar had moved up by 0.2 per cent against the euro to 1.5861.

Shares in London, Europe's premier stock market jumped by 1.64 per cent, helped along by talk of a possible bank takeover.

Other leading European markets also clocked up gains Monday with stocks in Paris and Madrid also gaining more than 1.0 per cent. Zurich was up almost 2.0 per cent.

The news that German tyre maker Continental was in takeover talks also helped to buoy Frankfurt stocks with the market's key DAX index rising 1.0 per cent to 6213 in late morning trading.

Shares in emerging Europe also joined the move upwards with the bourse in Warsaw rising by 0.4 per cent and 1.49 per cent in Moscow. (dpa)