European stock markets rally as fears of france downgrade abate

Stock Markets rallied on Thursday morning as fears of a French debt downgrade abated, and the Italian finance minister prepared to present an austerity budget.

The FTSE 100 index in London climbed more than 100 points to 5108 in early trading, a gain of 2% that wiped out much of Wednesday's losses. Markets are eagerly awaiting a new austerity plan for Italy, which will be presented by Giulio Tremonti in Rome at 11am local time (10am BST) despite some opposition from unions.

George Osborne is due to to speak in London at about 1pm at a special sitting of parliament called after the recent rioting in the capital and across England. He is expected to defend his austerity measures, at a time when Europe's debt crisis is deepening and Labour politicians have latched on to the Bank of England's warning that the outlook is worsening.

France's CAC and Germany's Dax both rebounded 2.4% in early trading, while Italy's MIB was up 1.3%, Spain's Ibex added 1% and Portugal's PSI rose 1.8%.

Source: Guardian.co.uk