London - Banking stocks rallied on the London stock market Wednesday following the announcement by the government of a massive bail-out for the banking sector.

Shares in Halifax Bank of Scotland (HBOS) jumped by 27 per cent in early trading, after a slump of more than 40 per cent Tuesday.

Royal Bank of Scotland (RBS) saw its share price rise by 12 per cent after losses of 39 per cent during turbulent trading Tuesday.

The Financial Times Index opened up by 2 per cent, or 100 points, following the bail-out of 50 billion pounds (87 billion dollars) announced by the government. dpa