Markets roared back to life today as speculation of a major stimulus package from the US government boosted sentiment in equity markets.

London's benchmark index closed 9.05pc higher, its strongest gain since 2008, while the German Dax surged 11pc in the eurozone.

Across the pond, stocks on Wall Street are also flew high with the Dow Jones seeing its biggest rally since 1933.

"Political fighting in the US has prevented a stimulus scheme from being revealed earlier, but dealers are optimistic nonetheless," said CMC Markets UK analyst David Madden.

US senators remain gridlocked, with Democrats on Monday again blocking a nearly $2 trillion rescue package for the economy.