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European stocks recover, London FTSE up 1.39%

European stocks recover, London FTSE up 1.39%
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First Published: Mon, Aug 13 2007. 01 29 PM IST
Updated: Mon, Aug 13 2007. 01 29 PM IST
London, 13 August: Europe’s main stock markets rose strongly in initial trading today after suffering massive losses last week owing to the US housing crisis.
Shortly after the open, London’s FTSE 100 of leading shares stood 1.39% higher at 6,122.10 points.
In Frankfurt the DAX 30 won 0.95% to 7,413.30 points and the Paris CAC 40 climbed 1.19% to 5,513.67.
The DJ Euro Stoxx 50 index of top eurozone shares advanced 1.06% to 4,205.95 points.
Europe’s stocks had slumped towards the end of last week, in line with other world equities, on renewed worries about the US subprime mortgage sector, which provides home loans to people with poor credit histories.
Some investors fear that the US housing woes may eventually weaken global economic growth.
The FTSE 100 had shed 2.99% last week after slumping a massive 3.71% on Friday, 10 August.
Britain’s top share index rallied 1.6% early today, led by banks and miners as it bounced from last week’s steep losses, when a credit squeeze forced central banks to inject cash to calm panicky investors.
FTSE’s fall was the biggest in more than four years -- on concerns of a credit crunch sparked by the fallout of the US subprime mortgage market.European shares also traded higher.
“Given Wall Street did rally a little bit towards the end (of Friday, 10 Aug) and futures have been trading strongly since, and given the size of the sell-off on Friday, you get that kind of bounce ... people start bargain hunting,” said Tim Hughes, head of sales trading at IG Index.
Last week the UK benchmark index lost 3%.
“Volatility will obviously continue to feature for the foreseeable future. I don’t think anything has fundamentally changed in what’s causing the volatility ... that has not fundamentally gone away,” Hughes said.
Banking stocks rebounded after last week’s hammering, with Barclays, Royal Bank of Scotland, HSBC, HBOS and Northern Rock all up.
The Wall Street Journal said in its online edition that Barclays Global Investors and Goldman Sachs were expected this week to outline the performance of their quantitative equity funds.
It said the performance of Barclays Global Investors’ 32 Capital Fund Ltd. had been challenging but it had not faced large-scale redemption requests from clients or liquidations of its holdings.
France’s BNP Paribas last week froze redemptions from three funds, which sparked fears of a credit crunch and the global equity sell-off.
In the financial sector, Man Group, the world’s largest-listed hedge fund group, tacked on 3.2% after losing 9% on 10 August, while private equity firm 3i Group climbed 3.1%, also boosted by an upgrade from UBS. But ICAP slipped 2.4%.
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First Published: Mon, Aug 13 2007. 01 29 PM IST