European shares rise after G20 rescue pledge

European shares rose on Friday after the Group of 20 economies pledged action to help financial markets and increase the flexibility of the euro zone''s rescue fund. After sharp falls on Thursday, European shares rallied somewhat. London''s FTSE 100 index rose 1.05 percent, Frankfurt''s DAX 30 increased by 1.22 percent and the Paris-based CAC 40 gained 1.43 percent. French banking stocks, which have exposure to euro zone sovereign debt , were amongst the top risers, with Societe Generale, Credit Agricole and BNP Paribas up 1.9 to 3.9 percent. Asian markets remained nervous, however, recording losses for a second day in a row. South Korea''s main Kospi index dropped 5.7 percent and Australia''s ASX fell 1.6 percent. In a joint statement issued late Thursday, the G20 finance ministers and central bankers pledged to take action to calm heightened market fears. The finance ministers promised to deliver "a strong and coordinated international response to address the renewed challenges facing the global economy." The statement pointed to "heightened downside risks from sovereign stresses, financial system fragility, market turbulence, weak economic growth and unacceptably high unemployment." They vowed to respond by working together to support growth and implement "credible fiscal consolidation plans." "This will require a collective and bold action plan, with everyone doing their part," they said in a statement. Shares of several European banks have tumbled and funding costs have risen as investors worried about bank exposure to debt issued by Greece and other debt-heavy European countries. World stocks slumped on Thursday to their lowest level in 13 months, hurt by the risk of a new U.S. recession and weaker economic data from China as well as Europe''s debt problems.