Rescue plan results in market fireworks
The Swiss Market Index (SMI) of 20 leading companies opened strongly on Monday in response to government efforts to shore up the world's troubled financial system.
The SMI started the week 6.4 per cent up on Friday evening and at lunchtime stood 7.5 per cent higher at 5,750 points, the highest percentage increase since 1988.
Banks were the big winners, with UBS’s share price shooting up more than 15 per cent by midday to SFr19.68 ($17.40).
Credit Suisse gained 12 per cent after Merrill Lynch upgraded it to “neutral” from “underperform”, saying last week’s 40 per cent fall was overdone. Julius Baer gained 12 per cent after Deutsche Bank upgraded it to “hold” from “sell”.
On Friday the SMI tumbled nearly eight per cent – the worst drop in 17 years. The SMI had closed at 5,347, down 22 per cent over the week.
On Monday morning the European Central Bank, the Bank of England, the US Federal Reserve and the Swiss National Bank jointly announced they would offer unlimited short-term dollar credits to banks in an effort to relieve ongoing stress on the world financial system.
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