The index of Germany's top 30 listed companies jumped 7.3 percent to 5,791 points in midday trade, as details became known of the government's intention to inject €80 billion into troubled banks and offer €400 billion in guarantees for interbank loans.
Hammered in recent weeks, bank shares skyrocketed on the news on Monday. Troubled Hypo Real Estate soared 38.74 percent higher to €5.73, Commerzbank rose 16.13 percent to €11.27, and Deutsche Bank climbed 9.16 percent to €34.09.
But many German traders still remained skittish after the horrendous losses suffered last week.
“We'll have to see if this recovery is sustainable. It's without a doubt built upon extremely thin ice,” said a trader in Frankfurt.