Wed, Oct 08, 2008 - Page 1 News List

World stock markets stabilize despite bank woes

AFP , LONDON

World stock markets stabilized yesterday despite further banking woes across Europe, as Asia pulled back from the brink on hopes of cuts to global interest rates, dealers said.

London eased 0.15 percent in volatile late morning trade after slumping by 7.8 percent on Monday in a global markets rout.

Frankfurt dipped 0.08 percent in trade yesterday, while Paris added 0.82 percent nearing the half-way stage. Frankfurt had nose dived 7.07 percent on Monday and Paris by 9.04 percent — the biggest one-day drop in its history.

In Asia yesterday, Tokyo fell by 3 percent, while Sydney jumped 1.7 percent after Australia’s central bank sprang a surprise interest rate cut.

Central banks around the globe yesterday continued to pump billions of dollars into money markets amid a squeeze on world credit.

Asian markets ended well off their lows after Australia’s central bank slashed interest rates by a hefty one percentage point, a dramatic move aimed at shielding the economy from the ongoing financial turmoil.

The move sparked hopes policy makers in other countries could follow suit, analysts said.

However investors yesterday briefly sent Tokyo share prices to their lowest point for more than four years on fears that government efforts to end the crisis may be too little, too late. Hong Kong was shut for a public holiday.

Stock markets in Seoul, Taipei and Singapore all rebounded following the news out of Sydney. Wellington ended down 1.45 percent.

“The market is still panicky,” Credit Suisse strategist Satoru Ogasawara said. “Many people are simply dumping shares.”

Moscow’s two main stock exchanges said they would stay closed yesterday morning, while markets in the oil-rich Gulf states opened sharply lower.

Russia’s two main bourses were ordered to close by the country’s financial regulator after stocks lost nearly a fifth of their value on Monday.

Traders were looking for any signs that authorities would take coordinated action to try to quell the turmoil, and in particular whether they would cut interest rates to shore up market confidence and global economic activity.

Finance chiefs from the G7 rich nations were scheduled to meet on Friday in Washington.

Also See: Australia cuts interest rate by 1 point

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