Global markets rally as investors snap up banks

10am: Global markets are continuing to trade in positive territory, building on yesterday's gains, with investors eyeing up value in depressed banking stocks which have been heavily sold off.

All five banks in the FTSE 100 are posting healthy gains, driving the index up 1.59% or 81 points to 5,176, at 10.10am.

Investors are returning to banks despite fears over the outlook for the sector, with the latest round of selling yesterday sparked by US money market funds cutting their exposure to European banks in June and July.

Lloyds is the biggest riser, up 4.14% to 29p, with Barclays up 3.25% to 151p, while Royal Bank of Scotland has also fared well, gaining 2.95% to 20p.

HSBC and Standard Chartered are also firmer.

Elsewhere in Europe, the German Dax is up 2% to 5,581, while the French Cac has gained 2.07% to 3,114.