NEW YORK, Sept 27: Global markets saw more tension on Friday as the White House and Congress wrangled over a proposed bailout of the ailing financial sector, but Wall Street shares managed to finish mainly higher.

Most other markets saw steep losses as talks on a $700-billion rescue package appeared to be at an impasse.

But with US lawmakers signaling they would work through the weekend to hammer out an agreement, the Dow Jones Industrial Average reversed course and closed up a solid 1.10 per cent.

The tech-heavy Nasdaq slipped 0.15 per cent and the broad-market Standard & Poor’s 500 index rose 0.34 per cent.

Analysts at Briefing.com said there was “no particular news item” that prompted the late-day rally.

But they added that the growing consensus is that a federal asset funding plan will be approved. President George W. Bush issued another plea to fractious lawmakers to come together and approve a plan that would restore confidence and calm frazzled markets.We’ve got a big problem ... we need a rescue plan, Bush said in televised remarks minutes after Wall Street shares plummeted in line with Asia and Europe and as central banks again injected tens of billions of dollars to avert seizure on interbank lending markets.

European exchanges took a pounding. The London FTSE 100 index fell 2.09 per cent, in Paris the CAC 40 lost 1.50 per cent and in Frankfurt the Dax gave up 1.77 per cent.

Shock waves raced through European financial markets after a US government-engineered buyout late Thursday of a top savings and loan bank, Washington Mutual, by JPMorgan Chase late in the biggest-ever US banking failure.

The markets had known that Washington Mutual was not financially sound, but they were holding out hope that the government would act (on a rescue plan) before regulators had to step in, said Nathan Topper at Economy.com.

Belgian-Dutch financial group Fortis struggled to dispel liquidity concerns that dented its shares, insisting there was “not a single chance” of failure.

The bank announced an emergency asset sale to raise 5.0 to 10 billion euros (up to $14 billion ). Fortis shed nearly 21 per cent at 5.18 euros, its lowest closing value in 15 years.

With the fate of the massive US bailout hanging in the balance, “confidence is swinging like a seesaw at the moment,” said Joshua Raymond, a market strategist at City Index.

We can ill afford to drag this out longer than the weekend. It’s increasingly looking like the bailout plan lacks the substance to get through Congress, which would be devastating to markets. Martin Slaney, head of derivatives at spread betting firm GFT in London, said: This financial version of ‘Deal Or No Deal’ is not conducive to restoring badly needed confidence. Timing is the key issue here. If a deal hasn’t been signed and sealed over the weekend, expect massive market turmoil. Monday will be a bloodbath, Slaney said.

Global markets have been in turmoil since the collapse last week of Wall Street investment giant Lehman Brothers and the US government’s rescue of insurance giant AIG.

In Latin America, Brazil’s Ibovespa index Sao Paulo index shed 2.02 per cent and Argentina’s index fell 0.91 per cent.—AFP