Soaring bank shares reverse slide

Spectacular gains for banking stocks left London's leading share index near to reversing the 10% slide seen in this week's financial turmoil.

The improvement came after news of a huge US rescue plan to relieve banks of their "toxic" assets and a temporary City ban on short-selling.

The FTSE 100 Index rocketed more than 8% at one point to leave it on course for its biggest one-day gain since being established more than 24 years ago.

Royal Bank of Scotland topped the list of shares, up 40%. Lloyds TSB, which fell sharply on fears over its financial strength, lifted 35%, or 83p, to 320.5p.

European stock markets were also soaring, with Paris's CAC 40 7% up and Frankfurt's Dax 5% higher.

Gordon Brown also moved to calm nerves, saying: "We are now working with our international partners about broader intervention we are in a position to take."

US Treasury Secretary Hank Paulson provided the main market boost after revealing he was hatching a plan to rescue banks from their billions of dollars worth of "distressed" mortgage-backed assets and which have led to the global banking crisis.

"We're coming together to work for an expeditious solution which is aimed right at the heart of this problem," Mr Paulson said.

New York's main share index responded by posting its biggest gain for nearly six years on Thursday - up 410 points or nearly 4% - while Hong Kong's Hang Seng leapt nearly 10%.

The turnaround in London also came after the Financial Services Authority issued its temporary ban on the "short selling" of listed financial firm stocks - in which traders look to profit from falling share prices - in a bid to quell the market turmoil.