10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – Banks and financial stocks rallied for the second day in a row.

Global Markets Update

European financial stocks rallied for the second day in the region on the optimism that companies can withstand the ongoing credit market crisis. The plan to raise $19 billion from Lehman and UBS lifted sentiment in the sector and in the regional trading. AXA, Allianz, Commerzbank, Barclays, HSBC, BNP Paribas, UBS and Credit Suisse gained for the second day in a row.

WestLB AG, the state controlled German bank reported 1.6 billion euros in losses on the subprime loans related write down of 2.1 billion. The bank still has risky loan portfolio of 23 billion and it hired Deutsche Bank and a unit of Allianz to manage this portfolio. Separately the bank plans to lay-off 1,300 people to reduce operating costs.

U.S. stocks edged lower at close after a sharp rally in financial stocks a day ago. Research in Motion jumped after it released higher than expected earnings. Crude oil rebounded nearly 3% after weekly inventory report showed lower than expected levels.

The Fed Chairman Bernanke said that conditions for economy will improve later in the year and further added that U.S. economy may not grow and may even shrink during the first half of this year. The remarks kept stock market in check in the morning trading. Weekly crude oil inventories rose but that of gasoline fell sharply. CarMax rose after reporting lower than expected decline in earnings. Electronic retailer, Best Buy edged higher after its net income dropped 3.4%.

Financial stocks surged in Australia after a rally in the U.S. and European markets. Enthusiastic investors showed appetite for risk when Lehman and UBS offered to raise $19 billion. Macquarie Group surged 10% and National Australia Bank Ltd added 5.2% while Commonwealth Bank of Australia gained 4%. ANZ added 5% and Westpac was up 6.5%. Gindalbie Metals largest investor placed injunction on the sale of stock to cover margin call at a failed broker.

Vehicle sales in March in India rose despite a rise in interest rate. Mahindra sales in March surged 20% and sales at Tata rose 6%. However, Bajaj sales of motorbikes fell 10% on stiff competition in the segment. Maruti earlier reported flat sales from a year ago. Tata Motors rose 1.5% and Mahindra gained 2.6%. Indiabull Securities fell to a new low today.

Stocks in Hong Kong surged after a steep rise in the U.S. indexes and an increase in European stock markets. Hang Seng Index retreated from a 4.6% increase in the morning to close up 3.20% or 734.97 at 23,872.43, and the China Enterprises Index rose 4.7% to 12,807.35. In Shanghai, CSI 300 fell 1% to 3.547.98. Investors in China continue to dump stocks. Net redemptions in investment funds in China fell by Rmb 17 billion.

Japanese stocks surged after tracking gains in the U.S. and Europe. More than 70% of trading on Tokyo Stock Exchange originates with foreign investors. Nikkei 225 rose 4.21% or 532.95 to 13,189.36, and the broader Topix Index gained 1.5% or 17.5 at 1,230.49. Of the Nikkei 225 index shares 214 gained, 8 declined and 3 were unchanged. Shinko Securities led advancers in the Nikkei 225 index shares with a surge of 14%.

European Markets indexes

In London FTSE 100 Index closed higher 63.30 or 1.08% to 5,915.90, in Paris CAC 40 Index increased 45.97 or 0.94% to close at 4,911.97 and in Frankfurt DAX index higher 57.11 or 0.85% to close at 6,777.44. In Zurich trading SMI increased 102.35 or 1.37% to close at 7,596.65.

North American Markets indexes

Dow Jones Industrial Average lost 45.44 or 0.36% to a close of 12,608.92, S&P 500 closed down 2.65 or 0.19% to 1,367.53, and Nasdaq Composite Index decreased 1.35 or 0.06% to a close at 2,361.40. In Toronto TSX Composite closed up 73.42 or 0.55% to 13,514.14.

Of the 30 stocks in Dow Jones Industrial Average, 9 closed higher, 21 closed lower, and none were unchanged.

Merck led the decliners in the Dow Jones Index with a loss 3.2% followed by losses in AT&T of 1.9%, in Caterpillar of 1.8%, and in JP Morgan of 1.6%. General Motors led the gainers in the index with a gain of 4% followed by increases in DuPont of 2.3%, in Exxon Mobil of 1.7%, and in Boeing of 1.2%.

Of the stocks in S&P 500 index, 275 stocks increased, 218 declined, and 7 were unchanged. Of the stocks in the index, 15 stocks fell more than 3% and 21 gained more than 3%.

National City Corp led the decliners in the S&P 500 index with a fall of 7.7% followed by losses in Schering Plough of 6%, in Unisys of 5%, in Bank of New York Mellon of 4.8%, and in Freddie Mac of 4.76%.

Dillards led the gainers in the S&P 500 index with a rise of 14.5% followed by increases in CIT Group of 9.1%, in Micron Technology of 6.5%, in Tellabs of 4.9%, and in Molex of 4.8%.

South American Markets Indexes