World sharemarkets swung from some of the biggest losses in decades last week to the Dow Jones, Nasdaq and S&P 500 in New York booking record gains of more than 11% each on Monday trading as European governments' intervention in banking ills got investor support.
In the eight days' trading before Monday's surge, which was underpinned by European governments' intervention to bail out their ailing banks, world sharemarkets were under siege from panicking investors which saw some major markets stripped of 10%-20% of value by cash hungry investors.
However, market analysts remain unconvinced a recovery is under way given the wild negative and positive swings booked by bourses in recent days.
Yesterday, the NZX SE 50 index closed up 5.9% with moderate trading of $96 million. ABN Amro Craigs broker Peter McIntyre said the NZX "couldn't escape" a good day after the global rally.
The turnaround on Monday saw a marked improvement for the United Kingdom's FTSE 100, from 21% down.
The French Cac and German Dax bourses were up, as were the main Asia-Pacific markets.
With only hours to go yesterday, the ASX All Ords was easing from a 3.68% gain and the S&P 200 from a 3.4% gain, while just after mid-session the Nikkei in Japan was up 13%, with the major Asian bourses all trading beyond 3.5%.
Mr McIntyre said while investor confidence was buoyed, there needed to be more orderly flows in all the aspects of the markets before a recovery could be considered.
"No way are we out of the woods yet. But it felt a whole lot better today" than last week's dramatic losses, he said.
Three major British banks could take 37 billion ($NZ108.97 billion) in government money to boost their capital, as European governments acted to boost confidence in the battered industry.
Royal Bank of Scotland said in a statement it would boost its capital by 20 billion, including the UK Government taking 5 billion in preference shares and 15 billion underwritten by the Government, Reuters reported yesterday.
In Paris, a report said the French Government would create a 40 billion fund to take stakes in banks.
However, the French presidential office declined to comment on the report.
United States Treasury Secretary Henry Paulson was meeting top Wall Street bankers in a scramble to finalise a plan to buy bank shares, an about-face from a previous focus on buying banks' bad debt from banks.
The United States has since moved closer to the positions of European leaders, who were in Washington during the weekend for meetings of the Group of Seven major economies, the International Monetary Fund and the World Bank.
