DAX surges higher on bank rescue plan

DAX surges higher on bank rescue plan
Photo:DPA
Germany’s leading stock index the DAX surged ahead on Monday, as bank shares were buoyed by the government’s plans to set up a massive rescue package for the financial sector.

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.