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Europe, U.S. stocks follow Asian gains

  • Story Highlights
  • European stocks start week higher, following lead of Asian-Pacific markets
  • Monday activity follows volatile week on world markets
  • Dow Jones recorded large gains, losses last week
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(CNN) -- World stock prices climbed sharply Monday as governments continued to pump money into markets in an attempt to stabilize them amid the throes of the financial crisis.

After a positive day in Asia, London's FTSE index closed up more than 5 percent while Paris and Frankfurt both managed modest gains.

Lower interbank lending rates -- with three-month dollar loans falling for the sixth straight day -- also buoyed markets.

In the United States, the Dow Jones Index of leading shares climed 1.6 percent in morning trading, helped by U.S. Federal Reserve chairman Ben Bernanke's support to more fiscal stimulus.

The Dow Jones industrial average added 413 points, or 4.7 percent, according to early tallies, pushing the Dow back above the 9,000 level at closing.

Meanwhile, Sweden joined the list of European governments pumping money into their financial markets in an attempt to stabilize them.

The $206 billion (1.5-trillion kronor) package will be used to back the nation's financial sector if it comes under pressure because of the global credit crunch, a government spokesman said.

And the Dutch government said Monday it would invest €10 billion ($13.4 billion) in ING Groep to boost the bank and insurance company's capital position.

In Tokyo, the Nikkei closed up 3.6 percent. In Australia, the All Ordinaries index finished the day in positive territory, gaining 3.9 percent.

South Korea's KOSPI gained 2.3 percent, while the Hang Seng index in Hong Kong increased 5.3 percent.

The Taiwan Weighted added 1.9 percent. In Singapore, the Straits Times index was up 2.9 percent. Mumbai's BSE SENSEX gained 2.7 percent.

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Gains in Asia came despite a weakening economic outlook for China, although the nation's overall economy remains strong.

China's gross domestic product -- a measure of the value of the country's goods and services -- was off more than two percent for the first nine months of the year, but still growing a healthy 9.9 percent. Weakening exports were a main reason for the slowdown. Read about China's slowdown

Wall Street is coming off an especially volatile week.

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The Dow Jones Industrials rallied more than 900 points last Monday, only to be followed by a 733-point slide at mid-week.

The stomach-churning week continued with a 400-point gain Thursday and then lost more than 100 points Friday.

CNN's Yuli Yang contributed to this report

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