LONDON, Aug 18: Nervous investors should wait before selling their shares amid the panic on world stock markets that has been sparked by US housing woes, the British media reported on Saturday.

“For an average investor with a mortgage, pension, and a bit of money in the stock market, inactivity is probably the best advice,” the Financial Times said in a leader column published on Saturday.

The advice came after a rollercoaster week for global equities.

Last week, Tokyo’s main shares index plunged by a massive 8.89pc to end Friday at 15,273.68 points.

European stocks mainly rebounded from heavy losses, while Wall Street clawed back some lost ground after the US Federal Reserve unexpectedly cut the lending rate that the American central bank charges commercial banks.

In New York, the blue-chip Dow Jones Industrial Average slumped 1.22pc to end the week at 13,079.08 points, after diving and rocketing by more than 300 points over the last five days.

In Europe, the main indices in London and Frankfurt jumped into positive territory, gaining 3.5pc and 0.48pc respectively after a week’s stormy trade. Paris shares fell lower, however.

“Yesterday’s rally in the FTSE may prove a temporary reprieve rather than an absolute pardon for worried members of pension schemes, homebuyers with mortgages and millions of other investors with equities,” the Daily Telegraph warned on Saturday in a comment piece.

“Some experts say share prices will resume their downward trend, if the US Federal Reserve’s intervention is seen as an act of desperation which cannot be repeated every time investors take fright.”

However, despite those misgivings, the paper urged investors with a longer-term view not to cash in their shares.

“Investors with no need to get back into cash within the next year or so, who can afford to take a medium to long-term view, should batten down the hatches and hold on tight,” the paper said.

The FT, meanwhile, added that strong global economic growth was another good reason for investors to keep hold of shares.

“With the world economy growing fast, it seems an unlikely time for (company) profits or equity valuations to collapse,” the financial daily said.

“If you were happy to buy shares a month ago, there is little reason to sell them now.”

The Fed’s move on Friday was the most dramatic development since fears of a credit crunch first sent global share prices reeling earlier this month.

Investors fear a credit squeeze -- whereby banks suspend normal lending practices -- sparked by rising numbers of American households who fail to keep up with payments on home loans in the subprime or high-risk mortgage sector.

Traders are worried that more and more banks and investment funds around the world will reveal the total extent of their losses from troubles in the US housing sector.

Other British media outlets, meanwhile, struggled to find the words to describe the credit crisis.

“The chaos seems to pivot on big loans made to American mortgage-borrowers who had roughly the same credit rating as a radish,” The Times newspaper said in its leader column.—AFP