European stock markets closed with solid gains for a second straight day Tuesday on sustained investor confidence in government efforts to snuff out a global credit crisis.

In London the FTSE 100 index of leading shares rose 3.23 percent to close at 4,394.21 while in Paris the CAC 40, which on Monday gained more than 11 percent, added 2.75 percent to finish at 3,628.52 points.

The Frankfurt Dax, which had also eclipsed 11 percent on Monday, finished at 5,199.19, a gain of 2.70 percent.

Wall Street’s early gains came in the wake of Monday’s record one-day 936-point jump and the strongest ever daily performance on Japan’s benchmark Nikkei 225 index, which surged 1,171.14 points, or 14.15 percent, to close at 9,447.57. Tokyo financial markets were playing catch-up because they were closed Monday for a holiday.

The Dow Jones index of leading U.S. shares was 183.19 points, or 2.0 percent, higher, having opened nearly 400 points higher.

The resurgence in the markets follows unprecedented government efforts to bring an end to the financial crisis that has threatened the outlook for the whole global economy.

So far, government actions appear to have worked, at least in terms of boosting confidence in the financial markets.

“The sense of relief is obviously pulpable, in terms of the share price gains, but minds will soon turn back to the state of the global economy,” said Richard Hunter, a strategist at Hargreaves Lansdown in London.

The U.S. became the latest to announce plans buy stakes in its banks.

Earlier, Asian governments took more steps to fortify their own financial systems, helping stock markets across the region to rally. Authorities relaxed regulations on companies buying up their own shares, a change that will help prevent takeovers and allow companies to prevent a nose-dive in their own issues.

Japan also promised to continue to protect people’s insurance policies and savings accounts, and said it will consider capital injection into medium-size and small Japanese financial institutions.

And in Australia, the government announced a plan to inject 10.4 billion Australian dollars (US$7.4 billion) to strengthen the country’s economy, helping send the S&P/ASX200 index 3.7 percent higher. Hong Kong promised to guarantee all bank deposits until 2010.

Hong Kong’s key index ended up 3.2 percent, while South Korea’s market jumped over 6 percent. The Philippine market surged more than 7 ercent and Indonesia’s market — shut half of last week due to dramatic declines — was up more than 6 percent.

Only China’s market fell — sliding 2.7 percent.

Russia’s stock markets joined the surge Tuesday, prompting regulators to suspend trading on one of the two major exchanges. The MICEX, where most of Russia’s trading takes place, climbed 11.2 percent before trading was halted for an hour. The RTS climbed 6.4 percent.

Oil continued to rise, with light sweet crude for November delivery gaining US$0.76 to US$81.95 a barrel in European trade on the New York Mercantile Exchange.

In currencies, the dollar was slightly lower on the day at 102.65 yen, and the euro was stronger at US$1.3715, though off earlier highs.

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