Eurozone heads agree bank bail-out as markets rally in response

The European and Asian markets rallied in response this morning to efforts by world leaders over the weekend to head off global financial meltdown. In early trading London's FTSE 100, France's Cac 40 and Germany's Dax indexes all rebounded by more than five per cent - following similar gains on Asian markets.

Last night the leaders of the eurozone agreed a British-style rescue plan to revive their struggling banking systems. German Chancellor Angela Merkel, left, French President Nicolas Sarkozy, centre, and British Prime Minister Gordon Brown, right, were among the leaders who attended a three-hour emergency summit in the Elysee Palace. The leaders of the 15 countries who use the euro single currency agreed a joint pledge to stem the recent financial turmoil, the size of which is expected to be announced today.

French President Nicolas Sarkozy - whose country currently holds the rotating presidency of the EU - said the plan addressed "all aspects of the financial crisis". He added: "This needs concrete measures and unity: that is what we have today."

Over the weekend finance ministers from the G7 countries approved a five-point plan to unfreeze credit markets while a number of countries announced individual rescue packages. In response Australia's benchmark index ended 5.6 per cent higher and South Korea's main Kospi index finished up 3.8 per cent. Japan's stockmarket was closed for a public holiday.

Meanwhile Wall Street is also tipped to rally when it opens later today, with Dow Jones futures pointing to a 400-point rise.