US stocks surged on Wednesday after the
Federal Reserve and five other central banks moved together to ease the flow of funds to banks hit by Europe's debt crisis. China's move to cut the level of cash that banks have to set aside as reserves also supported the sentiment.
Dow Jones industrial average had jumped 400 points in early trading on Wednesday.
The move by the central banks aimed to ease some of the tensions in global economy, as banks have grown increasingly wary of the fallout from Europe's debt crisis. Banks are afraid to lend to other banks, because no one is really sure how much bad European debt the other holds.
To ease the gridlock, the European Central Bank, U.S. Federal Reserve, the Bank of England and the central banks of Canada, Japan and Switzerland acted to get dollars flowing more freely.
In Europe, an already-strong week gained even more momentum. Germany's DAX was up 4.3 per cent at 6,052 while the CAC-40 in France rose 3.6 per cent to 3,136. The FTSE 100 index also rose 2.9 per cent to 5,489.
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