Markets surge on bailout ruling

World stock markets surged yesterday after a German court ruled that eurozone bailout payments were legal.

In London, the FTSE 100 was up more than 3 per cent at 5,318.59, with banking and mining companies leading the rally.

Germany’s Constitutional Court rejected a series of lawsuits aimed at blocking German participation in bailout packages for Greece and other eurozone countries.

But it said the government must seek the approval of the German parliament’s budget committee before granting such aid in future, a requirement which could further slow Europe’s response to the debt crisis.