The FTSE 100 has ended the day 8 per cent higher after the Government announced £37 billion of taxpayers' money will bail out UK banks.

The index opened 200 points higher after going into freefall on Friday at the end of the index's worst week since the 1987 crash.

By the close it was 324.8 points higher at 4256.9 - the second biggest one-day gain ever.

On Wall Street, the Dow Jones Industrial Average opened more than 300 points higher and by 5pm was 503.4 points up at 8954.6.

But there was mixed fortunes for banking stocks, with Halifax Bank of Scotland falling 34.10p to 90.10p, after Lloyds TSB revised the terms of its takeover and the mortgage giant reported a deterioration in trading conditions.

Lloyds finished the session 25.9p lower at 163.50p. It earlier emerged that investors will receive 0.605 Lloyds shares for every HBOS one they hold, rather than the 0.803 announced in September.

Meanwhile, shares in RBS, which could end up getting £20 billion of Government funding, experienced a rollercoaster ride as traders digested the possibility that around 60 per cent of the company could soon be in Government hands. They ended 6p down at 65.7p.

And Barclays, which plans to boost its capital position through its own means, was 7.75p higher at 215.25p, while HSBC rose 59p to 849p as it is not part of the bail-out announcement.

Tour operator TUI Travel was thrust near the top of the risers board amid talk its German parent company could seek to buy the remaining stake in the UK operation.

Oil prices rose off recent year-lows to more than $82 a barrel at one stage, helping BP rise more than 11 per cent or 42p to 418.25p. Rival Royal Dutch Shell also firmed 107p to 1387p.

Retailers were also enjoying a recovery after last week's turmoil. Fashion retailer Next was up 11 per cent, or 99.5p to 1047p, with Marks & Spencer adding 13.5p to 231.5p.

Winners: were Schroders up 220p at 900p, Kazakhmys ahead 74p at 408.5p, TUI Travel up 40.25p at 232.25p and Standard Life up 44.25p at 260p.

Losers: HBOS down 34.2p at 90p, Lloyds off 27.4p at 162p, RBS down 6p at 65.7p and Fresnillo down 2p at 209p.

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