December 15, 2007	Saturday	Zilhaj 4, 1428

LONDON, Dec 14: World stock markets paused for breath on Friday after closing sharply lower the day before on concerns about the economic fallout of the US home loan crisis, notably the global credit crunch.

London’s FTSE 100 index of leading companies rose 0.31 per cent to 6,383.31 points in late morning trade. Frankfurt’s DAX 30 grew by 0.30 per cent to 7,951.92 points, while in Paris the CAC 40 fell 0.28 per cent to 5,575.28.

Manoj Ladwa of Tradindex described the rally as “not very convincing”, adding: We were expecting a bit more... All eyes are going to be on the US, when it opens. Wall Street reopens at 1430 GMT.

World equities had dived Thursday as investors turned sceptical about efforts by major central banks to ease a dangerous global credit squeeze.

Investors sought to gauge the impact of a coordinated plan announced by the Federal Reserve and other central banks on Wednesday aimed at boosting liquidity in the international banking system.

The Fed, along with the central banks of the eurozone, Britain, Switzerland and Canada, agreed to make tens of billions of dollars (euros) available to cash-starved international banks.

US stocks ended mostly higher Thursday in volatile trade as a robust retail sales survey helped offset worries about the US banking and credit markets and a strong jump in a key inflation gauge.

The benchmark Dow Jones Industrial Average closed up 0.33 per cent and the broad-market Standard & Poor’s 500 index gained 0.12 per cent.

Technology shares did not fare so well as the Nasdaq composite ended down 0.10 per cent.

Market players see the Fed-led action as a step in the right direction to help ease the strains sparked by the collapse of the US subprime home loan market.

However uncertainty remains about the true extent of the losses involved in the US housing market debacle and until that is resolved, the credit and other markets are likely to be strained, dealers said.

Any news about the subprime problems will have negative impact, said Castor Pang, strategist at Sun Hung Kai Financial Group.

The most worrying thing is that everyone believes that the US Federal Reserve did not cut rates enough so this will continue to be on the back of people’s mind, he added.

The Fed on Tuesday decided to lower its benchmark Fed funds rate by 25 basis points to 4.25 per cent.

The cut disappointed investors who had been seeking a more aggressive reduction to help shore up stocks and the American economy in the face of the ongoing fallout from defaults on US subprime mortgages, or home loans held by risky borrowers.

—AFP