March 08, 2007	Thursday	Safar 18, 1428

LONDON, March 7: European stock markets extended gains on Wednesday in line with most Asian indices, following a week of traumatic losses to global equities, but Wall Street paused for breath following a rally.

Gains were tempered by falls in Tokyo, Hong Kong and New York, which all witnessed cautious trade with little economic or corporate news driving the markets.

In New York, the Dow Jones Industrial Average eased 0.07 per cent to 12,198.61 points after the opening bell and the Nasdaq composite shed 0.14 per cent to 2,381.80 points in initial trades.

Wall Street was subdued one day after a strong performance that recouped some of the heavy losses suffered the previous week, dealers said.

“The market’s huge rally on Tuesday was based as little on fundamentals as was last week’s plunge,” said Dick Green at Briefing.com.

“The rebound presumably was prompted by gains in the Asian markets. In fact, the market is simply going through dramatic swings in sentiment as it balances the need for a consolidation against the reality that the fundamentals aren’t that bad.”

US Treasury Secretary Henry Paulson continued to talk up the health of the world economy, while analysts said the bright economic outlook in Europe could help investors shake off the recent heavy downturn.

“Despite recent problems in financial markets, and some fairly mixed economic data in the US, economic prospects in both the euro area and the UK are bright,” ABN Amro analyst Dario Perkins said.

In late afternoon European trading, London's FTSE 100 index of top shares advanced 0.13pc to 6,146.40 points, Frankfurt's DAX 30 climbed 0.33pc to 6,616.61 and in Paris the CAC 40 added 0.33 per cent to 5,454.87.

Other European markets chalked up positive gains. Shares were up 0.93 per cent in Zurich, 0.80 per cent in Madrid and 0.83 per cent in Amsterdam.

In Asia, the main indices rose for a second straight day in Shanghai, Sydney and most other markets across the region, but Tokyo and Hong Kong turned lower.

Wall Street's strong rally on Tuesday had bolstered sentiment, dealers said, but they added that the gains may be capped by profit-taking as many investors are still uncertain about the global market outlook.—AFP