US markets surge on eurozone hopes

US markets added to their overnight gains on open this afternoon, following in the footsteps of European markets, which have rallied for the second day running.

The Dow Jones climbed 1.9% to reach 11,255, while the S&P 500 rose 1.9% to reach 1,185 in early trading.

Both the Dow Jones and S&P 500 had closed 2% higher after notes from the G20 summit in Washington revealed details of a rescue plan for the eurozone, boosting investor sentiment.

Today European markets have rallied as the European Central Bank hinted it will cut interest rates next month.

Comments by the ECB governing council members yesterday suggested the central bank will reduce interest rates by 50 basis points at the next meeting on 6 October.

The body also said it is considering boosting its liquidity provision to banks through 12-month, limit-free loans to help those struggling to raise capital.

The FTSE 100 had gained nearly 3% to reach 5,241 by mid-afternoon, while the French Cac 40 had climbed 4.1% to reach 2,976 and the Dax jumped 4.36% to reach 5,578.

Greek Prime Minister George Papandreou is trying to persuade German Chancellor Angela Merkel to help keep Greece's floundering economy afloat. He hopes to convince Germany that Greece has done enough to warrant the next €8bn tranche of bailout cash, and to convince his own Parliament to implement even more austerity measures, Reuters reports.

"The eurozone must now take bold steps toward fiscal integration to stabilise the monetary union. Let us not let allow those who are betting against the euro to succeed," Papandreou said.