China $586B Stimulus Boosts Stock Markets

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BEIJING, China - European stock markets opened higher Monday after Asia's markets were boosted by China's $586 billion plan to stimulate its economy, a main driver of global growth.

The FTSE 100 index of leading British shares was up 153.35 points, or 3.5 percent, at 4,518.31, while Germany's DAX was 178.10 points, or 3.6 percent, higher at 5,116.56. France's CAC-40 was 133.70 points, or 3.9 percent, higher at 3,6029.82.

Europe's gains follow across the board increases in Asia. Tokyo's Nikkei 225 stock average surged 498.43 points, or 5.8 percent, to 9,081.43, while Hong Kong's Hang Seng Index gained 501.20 points, or 3.5 percent, to 14,744.63.

In mainland China, where the benchmark Shanghai Composite Index has fallen by more than two-thirds since peaking in October, the index soared 7.3 percent to 1,874.80. Markets in India, Australia, Singapore and South Korea joined the region's advance.

And U.S. stock index futures were up, suggesting New York trading would open higher. Dow futures were up 139 points, or 1.6 percent, to 9,136, following Friday's 250 point increase.

Separately, the U.S. government on Monday provided new financial assistance to troubled insurance giant American International Group, including pouring $40 billion into the company in return for partial ownership. (Read more.)

The action, announced jointly by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would not be sufficient to stabilize the teetering company. All told, the moves boost aid to the company to around $150 billion.

The gains come in the wake of Chinese government's unveiling of a massive 4 trillion yuan ($586 billion) stimulus package to help stave off much of the economic slowdown. The package involves a mix of spending, subsidies, looser credit policies and tax cuts.