December 06, 2007	Thursday	Ziqa'ad 25, 1428

LONDON, Dec 5: Europe’s main equity markets rallied Wednesday on receding credit market worries, winning back the previous day’s losses after healthy gains earlier in Tokyo, analysts said.

We’ve got a rebound because yesterday’s fall was excessive, said Stephane Radiguet, fund manager at Raymond James Asset Management.

Wall Street ended the session only slightly lower, but we lost one and a half per cent and there was no reason for us to sell off that much. In early afternoon deals, London’s FTSE 100 index of leading companies rallied 1.28 per cent to 6,395.80 points. In Paris the CAC 40 added 0.99 per cent to 5,601.89 and Frankfurt’s DAX 30 won 0.75 per cent to 7,867.57 points.

The DJ Euro Stoxx 50 index of top eurozone shares increased by 0.71 per cent to 4,370.02 points.

The European single currency stood at 1.4718 dollars.

Wall Street shares declined Tuesday for a second straight day as investors mulled new signs of credit strains linked to the deepening housing slump.

In Europe, investors remained cautious over rate calls due Thursday from the Bank of England and the European Central Bank.

London’s property sector won support amid growing speculation that the British central bank could cut interest rates by a quarter-point from the current level of 5.75 per cent.

Homebuilder Barratt Homes saw its share price jump 3.91 per cent to 458.5 pence, and peer Taylor Wimpey soared by 3.79 per cent to 194.6 pence.

The BoE was forecast by many analysts to freeze rates because of higher inflation -- but the decision will be a close call amid a cooling housing market and the prospect of slowing economic growth, analysts said.

The ECB is widely expected to leave its key rate at 4.00 per cent on Thursday.

Interest rate cuts are a boost for companies because they reduce loan repayments and business costs -- and they increase the amount of disposable income available to consumers.

Across the Atlantic on Tuesday, the Dow Jones Industrial Average closed down 0.49 per cent at 13,248.73 points while the Nasdaq composite fell 0.66 per cent to 2,619.83.—AFP