Stocks climb on hopes of recovery

European stocks rose on Monday, after climbs in Asia as several governments intervened to boost their economies.

However by early afternoon markets had pared gains, with Germany's Dax up 0.8% while France's Cac rose 0.2% and London's FTSE 100 edged up 0.4%.

The MSCI index in the Asia-Pacific region had risen 5.1% after South Korea set out a $11bn stimulus plan and India cut short-term interest rates.

But traders were cautious, saying uncertainty remained in the market.

"There is still widespread scepticism over the steps taken to unfreeze the credit markets, as it will be a while before things start looking up on a sustained basis," brokerage India Infoline said following the rate change in India.

India's Sensex rose some 440 points or 4.6%.

Banks were among the main climbers in Asia and Europe.

Societe Generale was up 2.5% after seeing profits in line with forecasts, even though these fell more than 80% during the quarter.

Deutsche Bank was also higher, adding 5.2%.

China's ICBC was up nearly 10%, Indian lender ICICI added 8% and Australia's investment bank Macquarie rose 12.4%.

Confidence

South Korea announced an 14-trillion-won economic stimulus package on Monday that helped send shares in Seoul 1.4% higher.

Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong, said: "I don't think it's a massive change in direction.

"More a case of a little more confidence going forward in massively oversold stocks and ... global organized attempts to deal with the issues," he said.

Hong Kong's Hang Seng index rose 3% on hopes that lending limits would been lifted, helping small firms.

Central banks in the US, Japan, China, as well as India, have all cut borrowing costs to boost their economies in the last week.

There are growing expectations that the Bank of England and the European Central Bank will follow suit this week.