Open

Coming up

Don't miss

Replay


LATEST SHOWS

BUSINESS DAILY

New French economy minister signals changes to 35-hour week

Read more

IN THE PAPERS

Valls ♥ Business

Read more

MEDIAWATCH

'Macron-economy' pun already worn out

Read more

DEBATE

What Next for Gaza? Lasting Ceasefire Agreed After 50 Days of War (part 2)

Read more

DEBATE

What Next for Gaza? Lasting Ceasefire Agreed After 50 Days of War

Read more

FOCUS

Video: Milan is starting point for Syrian refugees’ European odyssey

Read more

MIDDLE EAST MATTERS

Terrorist ransoms: Should governments pay up for hostages?

Read more

ENCORE!

Kristen Stewart and Juliette Binoche star in 'Clouds of Sils Maria'

Read more

WEB NEWS

India: journalist launches "Rice Bucket Challenge"

Read more

  • Assad cannot be partner in fight against terrorism, says Hollande

    Read more

  • Evidence of Russian support for Ukrainian rebel counter-attack grows

    Read more

  • Platini will not run against Blatter for FIFA presidency

    Read more

  • New French economy minister takes swipe at 35-hour work week

    Read more

  • Erdogan's inauguration paves way for constitutional change

    Read more

  • Air France suspends flights to Ebola-stricken Sierra Leone

    Read more

  • Uzi shooting by 9-year-old rekindles gun debate

    Read more

  • Mother of American journalist asks IS leader for his release

    Read more

  • UN probe accuses Syrian regime, Islamists of ‘crimes against humanity’

    Read more

  • Uruguayans sign up to grow marijuana at home

    Read more

  • Missouri governor appoints black public safety director

    Read more

  • French unemployment rises 0.8% in July to record high

    Read more

  • Video: Iraq’s Yazidis flee to spiritual capital of Lalish

    Read more

  • Video: Milan is starting point for Syrian refugees’ European odyssey

    Read more

  • Airstrikes and Assad - Obama’s military conundrum in Syria

    Read more

  • IMF’s Lagarde investigated in French corruption case

    Read more

  • In pictures: The ministers in France's new government

    Read more

European stocks limit damage after ghastly month

Text by AFP

Latest update : 2008-10-31

Europe's main stock markets rallied after a slow start Friday to close up more than 2%, backed by strong morning trading in Wall Street. Despite the gains, October has seen the biggest monthly losses for European shares since 2002.

Wall Street shares bounced higher Friday, prompting solid gains in Europe at the end of a month of wild volatility and huge losses amid fears a deep recession lies ahead.
   
Equities in Frankfurt, London, New York and Paris have all plunged by between 15-17 percent since the beginning of October and Tokyo has lost about one quarter of its value.
   
"Today is month end, bringing to an end one of the most volatile months for financial markets in recent history," said Barclays Capital analyst David Woo.
   
"The concerns about the US economy and the global banking crisis remain."
   
Jeffrey Dawkins, Chief Investment Officer at US-based asset managers The FQ Group, said in a note to clients: "October is historically a good month for the markets. After a month like this, who needs a bad month?"
   
In New York, the Dow Jones Industrial Average reversed opening losses and was up 0.46 percent at midday at 9,223.06 points while the Nasdaq had risen 0.47 percent to 1,706.42 points.
   
The gains came despite data showing that American consumers cut spending by a sharp 0.3 percent in September in the face of an intense financial market storm.
   
A Commerce Department report said the drop in spending -- which accounts for two-thirds of US economic activity -- came even as incomes rose 0.2 percent.
   
The decline was the steepest since June 2004, according to officials, and sharper than the average 0.2 percent decline expected by private economists.
   
"Today's early economic releases haven't done much to change the broader market's perspective on the economy as the data showed continued weakening in consumer spending and a continued moderation in inflation pressures," said Patrick O'Hare at Economy.com
   
The focus remained on investor sentiment as the market closes out a horrific month of October that has pummeled stocks worldwide.
   
"Investor sentiment has been on the mend for the past three days, with demand for riskier assets growing as the financial crisis recedes," said Chris Lafakis at Moody's Economy.com.
   
"Yet the crisis has not fully passed and sentiment has not fully recovered."
   
In Europe, following a mixed performance in Asia, sentiment brightened on the news of the Wall Street advances.
   
In London, the FTSE 100 index added 2.0 percent to 4,377.34 points while in Paris the CAC 40 rose 2.33 percent to 3,487.07 points.
   
The Frankfurt DAX gained 2.44 percent to end the week at 4,987.97 points.
   
London investors digested news that British bank Barclays was to raise 11.7 billion dollars (9.3 billion euros), mostly from oil-rich investors in Abu Dhabi and Qatar, to bolster its finances amid the global credit crunch.
   
The new capital means that Barclays, down nearly 13 percent, will not have to take funding from the British government, unlike some of its competitors.
   
British telecoms operator BT Group saw its share price plunge 19 percent after it issued a surprise profits warning, saying that second-quarter earnings would fall short of expectations.
   
Shares fell sharply in Tokyo, down 5.0 percent, even though Japan's central bank cut its super-low interest rates for the first time in seven years -- by 20 basis points to 0.3 percent.
   
Hong Kong closed down 2.5 percent as investors locked in recent sharp gains sparked by hopes that the credit crunch was easing.
   
"The rally is seen to be over," said Francis Lun, general manager at Fulbright Securities in Hong Kong. "It's time to take profit."
   
The mood was brighter in other parts of Asia. Seoul rose 2.6 percent, Taipei added almost 4.0 percent and Sydney edged up 0.4 percent.
   
This week, central banks from the United States to Asia have lowered borrowing costs as part of concerted efforts to avert a financial system meltdown.
   
Speculation is growing that the European Central Bank and the Bank of England could follow suit next week with fresh rate cuts but the fear is that the action may be too late to prevent a global recession.

Date created : 2008-10-31

COMMENT(S)