European shares have rallied after sliding sharply on opening. After beginning the day close to record lows, there was volatile trading across the board, suggesting renewed optimism among investors despite the US Congress rejecting the economic recovery plan.

In early trading, the UK’s FTSE 100 was up 31 points, Germany’s Dax was down or 1.3% while France’s Cac 40 moved into positive territory. Meanwhile, the Irish government has announced that all bank deposits will be guaranteed for the next two years.

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