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World stocks up on Europe debt hope

World stocks have rebounded as pledges by European officials to resolve the region's debt problems once and for all helped soothe market jitters.

Oil prices rose above 82 dollars per barrel while the dollar slipped against the euro and the yen.

European shares were sharply up in early trading. Britain's FTSE 100 gained 2.2% to 5202.1, Germany's DAX jumped 3.2% to 5517 and France's CAC-40 rose 2.9% to 2943.4.

Wall Street, too, was set for a higher opening, with Dow Jones industrial futures advancing 1.1% to 11095, while S&P 500 futures were 1.1% higher at 1170.7.

The gains come on the heels of strong trading in Asia.

Japan's Nikkei 225 shot up 2.8% to close at 8609.9, a day after shedding more than 2% and ending at its lowest level since April 2009. South Korea's Kospi rallied 5% to 1735.7, Hong Kong's Hang Seng jumped 4.2% to 18130.5 and Australia's S&P/ASX 200 index ended 3.4% higher at 4004.6.

Investor sentiment improved after European ministers told a meeting of global finance leaders in Washington over the weekend that they would take bolder and more decisive steps to pull Greece back from the brink of bankruptcy. The country has only enough money to last until mid-October.

But some traders remained sceptical, saying it was unrealistic to think that Europe would be willing or able to throw the amount of money needed to dig Greece out from under its staggering debt load.

"Some of these eurozone nations cannot be bailed out," said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore.

"There's not enough cash to go around. The European banks stand to take a lot of pain on their balance sheets, which is what all this nervousness is about."

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From Belfast Telegraph