Shares on Wall Street surged by almost 300 points today on hopes that Barack Obama, America's President-elect, will go ahead with a huge stimulus package that could ultimately exceed $1 trillion.

The Dow Jones industrial average closed up 298.76 points to 8,934.18 in New York, following strong gains in London where investors sent stocks soaring to close up 249.88 points or 6.17 per cent to 4,299.2. Germany's DAX ended up 8.5 per cent and France's CAC by 8 per cent.

Earlier, Hong Kong’s Hang Seng index jumped 1,198.78 points, or 8.7 per cent, to 15,044.87 - its highest close in seven weeks - while Japan’s Nikkei 225 average jumped 411.54 points, or 5.2 per cent, to 8,329.05.

At the weekend, Mr Obama gave warning that “things are going to get worse before they get better”.

However, he also announced the biggest public works construction programme since Dwight Eisenhower created the interstate highway system half a century ago.

In his weekly radio address on Saturday, Mr Obama pledged a five-tier rescue plan to create jobs by combining traditional road-building projects with massive investment in new technology and green infrastructure.

Last week, the US Government announced a net loss of 533,000 jobs in November, the largest one-month drop since 1974, bringing unemployment to 6.7 per cent. The National Bureau of Economic Research said that America has been in recession for a year.

Also at the weekend, Mr Obama issued a veiled threat to the chiefs of America's three biggest carmakers that they should go if they do not take tough choices to restructure the businesses, which are close to securing a $15 billion bailout.

Hopes of a deal to tide Chrysler, General Motors and Ford over as the global demand for cars plunges helped lift the price of oil, which had tanked by 6 per cent last week.

The price of crude leapt by 6 per cent to more than $43 on news of the bailout as well as Saudi Arabia's plan to cut January oil supplies ahead of next week's meeting of the world's largest oil producing cartel.

US crude rose $2.51 to $42.25 a barrel after losing 6 per cent last week as the global economic slowdown put further pressure on demand. London Brent crude oil rose $2.51 to $42.25 a barrel.

Opec, the cartel which produces around 40 per cent of the world's oil, is widely expected to cut supply at the meeting next Wednesday.

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