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European markets bounce after Dow lift

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  • NEW: Nikkei closes up 2.8 percent, a day after suffering its worst loss in two decades
  • NEW: European markets open in the black after Dow Jones shows the way
  • Volatility to remain for sometime yet, market expert says
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(CNN) -- European sharemarkets opened higher Friday, only a day after they slipped to new lows on the back of recession fears.

A trader in Frankfurt ponders the markets, which have see-sawed all week.

In early trading London's FTSE, Paris's CAC-40 and Frankfurt's DAX were two to three percent higher, buoyed by the Dow Jones's 4.7 percent lift on Thursday.

Along with Asian markets, the European trio saw billions more wiped off their value on Thursday after bad growth data out of the U.S. and Germany shook confidence.

However some calm returned Friday, with Asian markets relatively stable.

Japan's Nikkei closed up 2.8 percent, recovering from its 11 percent slump Thursday -- the worst loss in two decades.

South Korea's KOSPI closed 2.7 percent, and Australia's All Ordinaries closed down 1.1 percent. Hong Kong's Hang Seng was even in afternoon trading, while the Taiwan Weighted was down 2.3 percent. Mumbai's BSE SENSEX was down about a percent, and Singapore Straits Times pushed into positive territory, gaining half a percent.

"Within Asia, people are getting worried about a recession," Daniel McCormack, a strategist for Macquarie Securities in Hong Kong told The Associated Press.

"Today people are trying to work out which sector, which stocks, which companies are going to get hit and starting to position themselves accordingly."

Mike Lenhoff of Brewin Dolphin Securities in London said stability would return -- eventually.

"(But) We will see the volatility remain with us for a very long time," Lenhoff said.

"I am convinced that we actually will see a recovery. It may take some time, but I'm pretty sure we will see a recovery."

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Meanwhile, oil prices jumped above $72 a barrel Friday in Asia from a 14-month low as investors bet fears that a severe global recession would devastate crude demand may be overblown.

Oil has fallen by about half since reaching a record US$147.27 on July 11.

"I think the market has been way oversold," said Gavin Wendt, head of mining and resources research at consultancy Fat Prophets in Sydney told AP. "The sentiment has been dominated by fear and panic, and when people are scared, they just keep selling."


Light, sweet crude for November delivery was up US$3.02 to US$72.87 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract dropped overnight US$4.69 to settle at $69.85, the lowest settlement price since Aug. 23, 2007.

Investors have been concerned that recent turmoil in the global financial system would trigger a worse than expected slowdown in economic activity.

Copyright 2008 CNN. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed. Associated Press contributed to this report.

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