Stock markets rebound

Published: Wednesday October 15, 2008

European stock markets enjoyed their second straight day of solid gains yesterday following a record rise in Japan, while Wall Street forged higher on the United States government's plan to pump US$250 billion into banks and shore up the country's financial system.

Though markets welcomed the American plan, pushing the Dow Jones index on Wall Street up 400 points after the open, investors decided to lock in some profits following Monday's sharp rises.

"This is a natural market in play after such a momentous rise yesterday," said Howard Wheeldon, senior strategist at BGC Partners.

The Dow Jones index of leading United States shares was 56.39 points, or 0.60 per cent, higher at 9 444.00, having opened nearly 400 points higher. At one stage, the selling pressure pushed the Dow into the red.

In London, the FTSE 100 index of leading shares closed 137.31 points, or 3.2 per cent, at 4 394.21 despite news that inflation in Britain is running at a 16-year high. Germany's DAX was up 136.74, or 2.7 per cent, at 5 199.19 even though a group of leading German economic think tanks said yesterday that Europe's largest economy is on the "brink of a recession".

The CAC-40 in France was 97.02 points, or 2.8 per cent, stronger at 3 628.52.

Wall Street's retreat from early highs came in the wake of Monday's record one-day 936-point jump and the strongest ever daily performance on Japan's benchmark Nikkei 225 index, which surged 1,171.14 points, or 14.15 per cent, to close at 9 447.57. Tokyo financial markets were playing catch-up because they were closed Monday for a holiday.

The resurgence in the markets follows unprecedented government efforts to bring an end to the financial crisis that has threatened the outlook for the whole global economy.


Source: Nation Newspapers
http://www.nationnews.com/story/292859571043985.php