LONDON, Jan 30: World stock markets and the dollar fought back on Thursday, while
oil, gold and bond prices fell, as the markets paused for breath awaiting fresh developments on the Iraq crisis.
After arresting an eight-day losing streak earlier in the week, the DJ Euro Stoxx 50 index of leading euro-zone shares rose for the third day in a row, gaining 2.3 per cent to 2,238.5 points in early deals.
Earlier in Asia shares were steady as markets took news of a record-breaking loss at
AOL Time Warner, delivered after Wednesday’s closing bell on Wall Street, in their stride.
It’s difficult to get a good handle on things but I think some people have been dipping their toes back in, said Seven Investment Management analyst Alex Scott.
The feeling has been that after the extent of falls we’d seen perhaps it was overdoing things even for a bear market. You don’t usually move in quite such straight lines, Scott added.
But he questioned whether the rally would be sustained given ongoing concerns about Iraq and the health of financial companies, particularly the life assurance sector.
I think there’s a fair degree of belief that markets are going to test further lows, Scott said.
On the foreign exchange market, the euro fell to $1.0762 from 1.0838 late on Wednesday.
The dollar’s rise, which was prompted by a recovery on Wall Street, came as United State Federal Reserve policymakers, as expected, left interest rates at a four-decade low of 1.25 per cent on Wednesday.
The rally in stocks prices prompted profit taking in the bond market with the benchmark German bund future losing 0.15 per cent to 114.80.—AFP
