Sun, Aug 26, 2007 - Page 10 News List

European markets hoping to extend fragile recovery

AFP , LONDON

Europe's main stock markets will look to extend their fragile recovery next week following recent rocky trading that was linked to fears of a global credit crunch.

London's FTSE 100 index of leading shares finished Friday at 6,220.10 points, a hefty gain of 155.9 points or 2.57 percent from a week earlier.

Frankfurt's DAX 30 jumped 1.74 percent over the week to finish at 7,507.27 and the Paris CAC 40 rocketed 3.84 percent in value to 5,569.38 points.

Stock market watchers said that current share price levels represented a great buying opportunity for investors.

"European equities still look attractive," ABN Amro analyst Ian Richards said.

"Despite the plentiful headlines surrounding US subprime mortgage problems, US economic prospects look robust. In Europe, momentum continues to accelerate, reflecting domestic activity strength alongside buoyant exports. And the picture looks equally encouraging in Asia," he said.

European and US stocks continued their rebound on Friday as better than expected US housing data defused some of the gloom which has beset financial markets.

After struggling earlier on Friday, the markets rose as a government survey revealed a surprise rebound in new US home sales last month.

The US Commerce Department reported that new home sales rose by a surprising 2.8 percent. A separate snapshot on durable goods orders also supported the gains.

Dealers said that central bank efforts have also helped equity markets recover from recent heavy losses amid fears of a credit squeeze.

Investors have also been soothed by the prospect of an interest rate cut some time soon in the US, the world's biggest economy. More and more US households are failing to keep up with payments on home loans in the US subprime mortgage sector.

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