European stocks surged 4.5 per cent today as hopes of a bailout for bond insurers and surging Nokia stock helped investors shrug off Société Générale's disclosure of a huge fraud.
In Dublin the Iseq has traded more than 4 per cent ahead for most of the day, and by 2.15pm it was up at 6823 with the banks enjoying a very strong day.
HSBC gained 4.4 per cent and Banco Santander rose 6 per cent, while SocGen's rival French bank BNP Paribas jumped 8.3 per cent.
Nokia, the world's largest handset maker, soared 14 per cent after posting strong fourth-quarter earnings, lifting the DJ Stoxx European tech sector index by 8.5 per cent and making it the best-performing sector.
New York's insurance regulator pressed major banks on Wednesday to put up billions of dollars to support ailing bond insurers and prevent investors from being forced to sell billions of dollars of bonds the insurers had covered.
Problems for bond insurers became the latest blow to European shares when US bond insurer Ambac lost its vital triple-A credit rating from Fitch Ratings last Friday.
SocGen shares fell 4.8 per cent when they started trading after 11.05am, but the news had little impact on stock in other banks, with the sector the top-weighted gainer on the pan-European FTSEurofirst 300 index.
SocGen said fraud by a single trader had caused it a €4.9 billion loss and that it would seek emergency funds as a result.
SocGen said the trader, responsible for futures hedging on European equity market indexes, had taken massive fraudulent positions in 2007 and 2008 beyond his authority.
AIB shares were up over 8.8 per cent at €15.62, Anglo Irish stocks were 8.9 per cent ahead on €9.92, while Bank of Ireland shares were over 8 per cent ahead at €9.95. By 2.15pm, Irish Life and Permanent shares had added over 7 per cent to per cent to €11.71.
At 12.24pm, the benchmark FTSEurofirst 300 index was up 4.45 per cent at 1,317.77 points, on track for its biggest one-day gain since March 2003.