Global markets soar on stimulus hopes
Hong Kong's Hang Seng index surges nearly 9%. European shares rally in morning trading.
LONDON (CNNMoney.com) -- Global stock indexes surged Monday, as investors bet that governments worldwide will keep launching measures to jolt their economies in the face of the financial crisis.
Signs that a deal to keep U.S. automakers out of bankruptcy is close also helped contribute to the upbeat mood.
Major European stocks soared in morning trading. Britain's FTSE 100 climbed 4.7%, while the CAC-40 in France and Germany's DAX both surged 6.4%.
The rally in Europe followed a spike in Asian markets. Japan's benchmark Nikkei index jumped 5.2%. The Hang Seng index in Hong Kong rallied 8.7% and the KOSPI in South Korea surged 7.5%.
U.S. futures, which offer an indication of how markets will open when trading begins in New York, rose sharply.
Governments around the world have been unveiling plans to revitalize their economies amid the financial crisis.
Chinese officials are considering new measures to support growth. They are meeting this week to discuss possible new steps to expand the $586 billion of stimulus already planned, according to the Associated Press.
Facing a financial crisis that is "going to get worse," President-elect Barack Obama said over the weekend his top priority is building a recovery plan "equal to the task."
Infrastructure, energy programs, and school construction projects will get people working and ultimately help build a stronger economy, he said.
Obama told NBC's "Meet the Press" that his incoming administration would be looking for spending projects that would provide "the most bang for the buck" to stimulate the economy.
Despite the nation's massive debt, Obama said he won't be focusing on building a balanced budget at the start of his administration.
"We understand that we've got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can't worry short term about the deficit. We've got to make sure that the economic stimulus plan is large enough to get the economy moving," he said.
Obama announced support Sunday for a short-term government bailout of the nation's carmakers that is tied to industry restructuring as he accused auto executives of a persistent "head-in-the sand approach" to long-festering problems.
Congressional Democrats and the Bush White House reached an agreement in principle to provide stopgap support for the U.S. auto industry, congressional and industry sources said late Friday.
The deal would keep the most troubled companies out of bankruptcy court at least through the end of March. While the money is less than the automakers were asking for in testimony before Congress this week, the package is designed to keep them operating so that the new Congress and the Obama administration will have at least a couple of months to draft and pass a longer-term solution.