LONDON (AFP) - US share prices sprinted ahead at the opening Tuesday following strong gains in Asia and Europe for a second straight day after governments threw lifelines to ailing banks. The Dow Jones Industrial Average surged 4.07 percent to 9,769.84 in the first five minutes, a day after the biggest single-day point gain for blue chips and best percentage rally in 75 years. The tech-heavy Nasdaq was up 2.52 percent at 1,890.65 at mid-day. Market action came as the US government pushed forward a massive rescue for the ailing banking system with a plan to inject up to $250 billion in capital to banks and offer new guarantees to help restore credit flows. "Last week's selling panic has been supplanted for the time being with a buying panic, with participants fearing they are missing out on the big rally," said Patrick O'Hare at Briefing.com. "As noted yesterday, we expect the rally effort to find resistance at some point as many anxious investors use it as an opportunity to calm their nerves by selling at higher prices that have lessened this year's sizable losses." Tokyo earlier in the day closed up by a record 14.15 percent as Japan unveiled fresh market-stabilising measures. The Bank of Japan said that in a bid to spur lending and thus ease a credit squeeze it was offering banks unlimited dollar funds at a fixed rate against appropriate collateral " a move that followed the lead of three central banks in Europe announced on Monday. Banks worldwide need the US currency to finance operations but the market on which they would normally borrow it has seized up amid extreme tension that erupted when the US subprime mortgage market collapsed over a year ago. The London stock market was up 3.54 percent in late trading while its main European rivals had also risen. London had closed more than eight percent higher Monday as Britain pumped billions of fresh dollars into credit-starved money markets and bought stakes in some of the nation's biggest commercial banks. "It's far too early to say whether the key aspects of trust and confidence have returned to the markets, but it does appear as though we have turned a corner," said GFT head of derivatives Martin Slaney. "Another historic day for Wall Street is symbolic of the waves of relief you can feel rippling through the markets as a result of the multilateral rescue action," he added. In late afternoon deals Tuesday, the Paris stock market had gained 2.26 percent, a day after rising more than 11 percent, its largest ever one-day gain. Frankfurt was 4.14 percent higher. European leaders on Monday unlocked more than one trillion euros in rescue funds for the troubled banking sector, pledging to plough capital into the hardest-hit banks and massively underwrite loans between financial players. "The battle may not be won yet but the auguries are encouraging," said Seven Investment Management analyst Justin Urquhart Stewart. "However, don't be fooled, the enemy is not yet beaten and the war not won. This will continue for some months yet." The emergency steps sparked hopes of an easing of the credit market gridlock that has shaken confidence in the international financial system and sparked fears of a global recession. Hong Kong closed up 3.2 percent on Tuesday, Singapore won 2.5 percent, Seoul climbed 6.1 percent and Sydney gained 3.7. Resisting the trend was China, where share prices closed down 2.71pc on Tuesday, erasing earlier gains as financial stocks retreated on worries that Wall Street may fall again after its historic one-day rally, dealers said. Stocks in the Arab world raced higher on Tuesday for the second straight day. Several Middle East markets put on at least seven percent with Riyadh, Dubai and Doha leading the way in the oil-rich Gulf region with gains of about 10 percent.