Sun, Aug 19, 2007 - Page 10 News List

European stock markets rally after stormy week


European investors will hope for more positive news on the distressed US property market in the week ahead as they seek to build on Friday's partial stock market recovery.

With a little help from the US Federal Reserve, markets in London and Frankfurt jumped into positive territory on Friday following a week's stormy trading.

In a move aimed at tackling fears of a global credit crunch, the US central bank slashed the lending rate it charges commercial banks by 50 basis points to 5.75 percent.

London's FTSE 100 index of leading shares finished Friday at 6,064.20 points, a gain of 25.90 points or 0.42 percent from a week earlier. That followed a plunge of 2.99 percent the previous week.

This week's rise was all the more impressive because the FTSE had nosedived on Thursday by 4.10 percent -- the biggest daily drop since March 12, 2003 in the run-up to the US-led war in Iraq.

Elsewhere on Friday, Frankfurt's DAX 30 added 0.48 percent over the week to finish at 7,378.29 points.

In Paris, however, the CAC 40 index shed 1.56 percent in value to 5,363.63 points after a loss of 2.67 percent the previous week.

With no end in sight to the ongoing US housing market crisis, analysts remained sceptical that the period of extreme stock market swings was over.

"There's no way that we can assume the recent volatility is now at an end," CMC Markets dealer Jimmy Yates said.

Traders are worried that more and more banks and investment funds around the world will reveal the total extent of their losses from troubles in the US subprime or high-risk home loan sector, analysts said.

"There is no longer any complacency about exposure to the US subprime sector," Capital Economics analyst Julian Jessop said.

Weekly movements

* London: FTSE 100 up 0.42 percent at 6,064.20.

* Paris: CAC-40 down 1.56 percent at 5,363.63.

* Frankfurt: DAX 30 up 0.48 percent at 7,378.29.

Source: AFP

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