City traders see first ray of sunshine amid chaos

"There's a bit more optimism, but, equally, this could just be seen as another panic measure."

Mr Hughes, 25, who works at CMC Markets, a financial spread betting firm on the edge of the Square Mile, went on: "There is still serious pressure out there, but now we are seeing the upside."

City banker Bruce Hatton, 33, was enjoying the sunshine outside the Stock Exchange. He finds himself trying to recover £50,000 he deposited with failed Icelandic bank Icesave, but was
cautiously optimistic.

He believes today's announcements are the "foundations to provide stability in the market".

"I don't think this is going to change the world. But I do think it's putting in place some form of foundations in the face of all the turmoil. This is what we've been looking for since July last year, when the credit crunch first started to take its toll."

At CMC, traders on the floor were taken by surprise by the midday cut of half a point in interest rates, which saw the FTSE 100 bounce back after a rollercoaster morning.

Earlier the traders, none of them older than 40, stared at the grey-haired man addressing them from the giant television screens hanging from the dealing room walls.

As Chancellor Alistair Darling spoke the telephones across the dealing room began to ring. And they carried on ringing as clients called in to place their bets on a market which opened down around 200 points on the back of a disastrous day's trading in Japan. By 8am, as markets opened, the noise in the dealing room began to rise. Traders, telephones cradled between ear and shoulder, shouted out prices of stocks as clients made their moves.

Within an hour, the rescue plan appeared to be turning to dust with the FTSE 100 down 350 points, including dramatic falls in the shares of banks Mr Darling was supposed to be saving.
"RBS has hit a new low," declared one trader at around 9am. "Ouch," retorted another. "Oooh," echoed a third.

Matt Buckland, 36, a trader who was heading home after an arduous night shift watching the Far East markets, was less than impressed by Mr Darling's rescue bid.

"It's too little too late," he said. "The whole problem with the banking sector is not just the lack of confidence in the markets but a lack of confidence in the Government. It is too little too late.

"To come out with his statement half an hour before the market opens is ridiculous. They have been faffing about for days when they should have been planning this over weeks. But to announce it with 30 minutes to go is not enough time to digest."

Gary Thomson, CMC's head of sales trading, said just after 9am: "The rescue package doesn't seem to be making a great deal of difference this morning."

CMC traded $1.4 trillion in shares last year. Analyst Mr Hughes said: "The telephones haven't stopped ringing this morning and I expect them to ring all day. Something needed to be done. But we have seen a $700 billion bail-out from the US which is not enough and so whether £50 billion can be enough in the UK remains to be seen. There will be suspicions about it.

By 9.30am, with Gordon Brown and his Chancellor in an emergency press conference at Downing Street, the markets had begun to calm down, the losses marginally not as bad as in early trading.

At one stage only HBOS — of the big banks — showed a rise in shares although then RBS showed a healthy rise.

Mr Brown and Mr Darling were telling the traders that they were finally hoping for peace in our time. But the traders at CMC weren't listening. "We're too busy to be sat there watching Gordon Brown and Alistair Darling," explained Mr Hughes. It will only become clear in the coming days if the rest of the City has stopped listening too.