LONDON, Nov 20: World stocks trimmed losses on Tuesday with many exchanges rebounding into the black as analysts said a recent global sell-off was overdone, despite lingering concerns about the US economy.
In late morning trade, London’s FTSE 100 index of leading companies won 0.46 percent to 6,149.10 points. On Monday, it had closed down 2.71 percent.
The UK equity market is registering a deeper oversold condition that at any time during the past two years, said Mike Lenhoff, chief strategist at Brewin Dolphin stockbrokers in London.
The trouble is that the economic news flow is likely to remain poor.Elsewhere in Europe on Tuesday, Frankfurt’s DAX 30 share index grew 0.45 percent to 7,567.00 points and in Paris the CAC 40 also climbed 0.45 per cent to 5,457.00.
The euro surged to $1.4797, which was an all-time high.
Stocks markets were mixed in Asia, with Tokyo and Hong Kong bouncing back strongly in late trade as speculation grew that the US Federal Reserve would cut rates again at its meeting next month, dealers said.
Bargain-hunters helped lead the gains in Tokyo, Asia’s largest bourse, where the benchmark Nikkei index slipped to a 16-month intra-day low in early trade before finishing a robust 1.12 per cent higher.
He said that a rumour of unknown origin spread through the market in late trade that the Fed will cut rates, sparking a buying bout.
Sentiment in Asia was also lifted by an online Financial Times report that the Fed was expected to give a brighter forecast for the US economy, even though the report, if true, would likely decrease chances of a rate cut.
The dramatic turnaround toward the close reflects expectations that the market might have hit a near-term bottom, for now at least, said Michael Hsu, an assistant vice president at Taiwan Life Asset Management in Taipei, which ended flat.
The biggest focus is whether US shares will stabilise or not, said Masayoshi Yano of Tokai Tokyo Securities.
On Wall Street overnight, the Dow Jones Industrial Average slid 1.66 percent, dropping below the psychologically important barrier of 13,000 after negative news in the banking sector.—AFP
