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US bank news lifts world shares US stocks flat before key figures
(about 1 hour later)
European and Asian shares have risen strongly in Tuesday trading, boosted by JP Morgan Chase raising its takeover offer for rival US bank Bear Stearns. US shares have opened little changed ahead of key consumer confidence data.
Echoing the overnight gains on Wall Street, stocks were further lifted by a surprise rise in US home sales. The main Dow Jones index was up just eight points to 12,560 before the latest monthly figures from the closely watched Conference Board report.
The UK's FTSE 100 index was up 3.5% to 5,690 in noon trading in London, while Japan's Nikkei earlier added 2%. European shares were up strongly, boosted by JP Morgan Chase raising its takeover offer overnight for rival US bank Bear Stearns.
JP Morgan's higher offer for troubled Bear Stearns has eased fears about the extent of woes in the banking sector. In Europe, the UK's FTSE 100 was up 186 points, or 3.4%, at 5,677, while Germany's Dax had advanced 3%.
'Ready for a rebound' France's Cac had added 3.4%, while Japan's Nikkei earlier added 2%.
France's Cac was up 3.4% in lunchtime trading in Paris, while Germany's Dax had added 3.3%.
We have gone down low enough and the market is ready for a rebound Francis Lun, Fulbright Securities
Hong Kong's Hang Seng index earlier closed up 6.4%, while shares in Australia added 3.3%.Hong Kong's Hang Seng index earlier closed up 6.4%, while shares in Australia added 3.3%.
In India, Bombay's Sensex gained 928.09 points, or 6.1%, to end at 16,217.49.In India, Bombay's Sensex gained 928.09 points, or 6.1%, to end at 16,217.49.
Investor attention now turns to the latest official US consumer confidence data due out later. 'Ready for a rebound'
JP Morgan's higher offer for troubled Bear Stearns has eased fears about the extent of woes in the banking sector.
Analysts were divided on whether Tuesday's gains were likely to continue.Analysts were divided on whether Tuesday's gains were likely to continue.
"I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong."I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong.
"We have gone down low enough and the market is ready for a rebound. Banks will lead the rally.""We have gone down low enough and the market is ready for a rebound. Banks will lead the rally."
But Societe Generale's Arthur van Slooten said the gains may only "be a temporary relief".But Societe Generale's Arthur van Slooten said the gains may only "be a temporary relief".
"To be convinced that this is the floor, we need more indications that the credit market is stabilising," he said."To be convinced that this is the floor, we need more indications that the credit market is stabilising," he said.
"Until that happens, equities will remain under pressure, so this could be a small rally in a bear market.""Until that happens, equities will remain under pressure, so this could be a small rally in a bear market."