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Source: media reports

Major world markets rebound

Major world markets rebound
AP
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First Published: Mon, Aug 13 2007. 05 10 PM IST
Updated: Mon, Aug 13 2007. 05 10 PM IST
London: Major world markets rebounded on 13 August 2007, regaining some of the ground they lost last week in a global plunge set off by worries about banks’ exposure to losses in the collapsing US subprime mortgage market.
The European Central Bank, which injected another €47.67 billion (Rs2,64,320 crore) into the banking system to soothe rattled credit markets, said conditions were “normalizing, ”but some analysts said the bounce could be a short one as worries about a credit crunch resurface.
The UK’s FTSE 100 Index rose 1.8% to 6,147.00 points, France’s CAC-40 gained 1% to 5,504.86, while Germany’s DAX Index advanced 0.8% to 7,404.95.
Still, some analysts were cautious. The FTSE-100 lost 3.7% on Friday — its biggest percentage drop in four years — and is down around 10% since its peak in June.
“It would be naive to think the worst is behind us,” said David Jones, chief market analyst at CMC Markets. “It wouldn’t be surprising to see the (London) market test the 6,000 barrier this week.”
The Nikkei 225, benchmark for the Tokyo Stock Exchange, edged up 0.2% to 16,800.05, recouping some of Friday’s drop as investors bought back into stocks with strong earnings. Hong Kong’s blue chip Hang Seng Index rose 0.45% to 21,891.10. South Korea’s benchmark stock index rose 1.1% to close at 1,849.26.
But there was no firm conviction the volatility of the last few weeks has ended.
“The Hong Kong market is in directionless trade. Aftershocks of US subprime mortgage woes are likely to continue rippling through markets in the Asia-Pacific region,” said Peter Lai, director of DBS Vickers Securities Ltd. in Hong Kong.
US stocks, too, were heading for a higher opening, with stock futures pointing to an extension of the Friday gains. Investors will be eyeing this week’s economic data, as well as any further moves by the Federal Reserve or European Central Bank to cushion the markets with additional liquidity.
Last week, the US, European, Australian and Japanese central banks poured funds into money markets as stocks dropped on concerns over US mortgages. The European Central Bank and the Bank of Japan acted again today.
The BOJ injected 600 billion yen (Rs20,645 crore) into money markets to try to bring more stability and the ECB said it added another €47.67 billion into the banking system, but added that market conditions are “normalizing.”
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First Published: Mon, Aug 13 2007. 05 10 PM IST