European Markets gaining strongly since early trade (MarketWatch) (24-01-2008)

LONDON (MarketWatch) -- European shares have been sharply higher since early Thursday morning, in the wake of the strong gains logged in Asian and U.S. equity markets on hopes that ailing bond insurers will be bailed out.

The pan-European Dow Jones Stoxx 600 index rose by 3.3% to 315.98 in early trading, with banks and insurers some of the strongest advancers.

Financial issues were gaining as strongly boosting indices after the gains in Asia and on Wall Street. In particular, shares of bond insurers surged in the U.S. on Wednesday, adding fuel to a major late-session rally in the U.S. stock market, on hopes that a bailout package orchestrated by regulators will rescue the ailing industry.

Societe Generale revealed problems that caused trading of its shares to halt in Paris after the bank said that a trading incident had resulted in a 4.9 billion euro ($7.1 billion) loss after an "exceptional fraud" committed by someone who usually trades plain-vanilla and European stock index futures.

It also said it was taking a 2.05 billion euro write-down, mostly on the fallout from the downturn in the U.S. housing market and related financial instruments.

SocGen aside, the broad gains from financials also lifted national indexes, with the U.K. FTSE 100 index up 3.1% to 5,783.10, the German DAX 30 index rose 4.4% to 6,723.06 and the French CAC-40 index climbed 4.3% to 4,835.48.

Away from financials, and shares of industrial conglomerate Siemens rose 4.1%.

Fiscal first-quarter net income jumped to 6.48 billion euros ($9.4 billion) from 788 million euros, driven by a 5.4 billion euros gain from selling Siemens VDO Automotive to Continental AG.

And PPR was another strong gainer, with shares up 6.5% in Paris.

The firm, which owns the Gucci and Puma brands, said that fourth-quarter revenue from continuing operations rose 15.1% to 5.88 billion euros.

Source: MarketWatch