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| Version 2 | Version 3 |
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| Stock markets retreat after rally | Stock markets retreat after rally |
| (39 minutes later) | |
| Stock markets have lost ground following two days of dramatic rises. | Stock markets have lost ground following two days of dramatic rises. |
| Investors fear that government action to strengthen the financial system will not prevent a worldwide recession. | Investors fear that government action to strengthen the financial system will not prevent a worldwide recession. |
| The UK's FTSE 100 index was down 2.6% and France's Cac 40 was 1.9% lower. Earlier, Hong Kong, Indian and Australian indexes had all fallen. | |
| Asian countries joined the global rescue effort, agreeing to set up a multi-billion dollar fund to buy banks' bad debt and support banks. | Asian countries joined the global rescue effort, agreeing to set up a multi-billion dollar fund to buy banks' bad debt and support banks. |
| The FTSE 100 index of the UK's top shares was down 116.2 points at 4,277.99 shortly after midday. | |
| France's Cac 40 had fallen 69 points to 3,559.64, while Germany's Dax index was down 93.57 points at 5,105.62. | |
| "The inevitable reversal for equity markets does seem to be under way," said Matt Buckland, a dealer at CMC Markets | "The inevitable reversal for equity markets does seem to be under way," said Matt Buckland, a dealer at CMC Markets |
| The rebound is over and the risk of recession as high as ever Patrick Shum, Karl Thomson Securities UK unemployment increases againBank crisis to dominate EU talksNew York 'faces 165,000 job cuts' | The rebound is over and the risk of recession as high as ever Patrick Shum, Karl Thomson Securities UK unemployment increases againBank crisis to dominate EU talksNew York 'faces 165,000 job cuts' |
| "We're seeing some profit taking and a reassessment of positions after the upswing, although there is an element of concern as to the longer term economic outlook creeping in," he added. | "We're seeing some profit taking and a reassessment of positions after the upswing, although there is an element of concern as to the longer term economic outlook creeping in," he added. |
| Borrowing costs fall | |
| However, there were signs that banks were becoming more willing to lend to each other. | |
| The cost of borrowing between banks, as measured by London interbank offered rates (Libor), fell slightly on Wednesday. | |
| It was the second consecutive session that Libor rates for euros, dollars and pounds had eased, and the cost of borrowing fell for all loan durations - from overnight to one year. | |
| Meanwhile, Iceland is still reeling from the worst economic crisis in the island's history | |
| Its central bank slashed its main interest rate to 12% from 15.5% on Wednesday, and the bank said that things could deteriorate further. | |
| "The impact of the collapse of the banking system will be extremely burdensome and the accompanying economic contraction very sharp," the board of governors said. | |
| Japan bucks trend | Japan bucks trend |
| Australia's main share index ended 0.8% lower and India's main index slid 6%, falling below 11,000 points. | |
| In Hong Kong, the Hang Seng index closed down 834.58 points, or 5% at 15,998. | |
| However, Japan's Nikkei 225 index ended the day up 1.1% at 9,547.47 points despite falling in earlier trade. On Tuesday, it recorded its biggest gain to date. | |
| "The rebound is over and the risk of recession as high as ever," said Patrick Shum, strategist with Karl Thomson Securities in Hong Kong. | "The rebound is over and the risk of recession as high as ever," said Patrick Shum, strategist with Karl Thomson Securities in Hong Kong. |
| "Governments across the world are cutting welfare spending and issuing more debt to help the financial system. But these measures will create a bigger problem of an economic slowdown." | "Governments across the world are cutting welfare spending and issuing more debt to help the financial system. But these measures will create a bigger problem of an economic slowdown." |
| In New York on Tuesday, Wall Street ended slightly lower at the close of trading as investors took some profits after Monday's big rises in stocks. | |
| Asian action | Asian action |
| The move by Asian countries to set up a multi-billion dollar fund to support banks came after Europe and US had announced a series of steps to recapitalise banks and guarantee bank lending to get credit markets moving again. | |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| Governments worldwide have pledged around $3 trillion as part of efforts to stem the financial crisis. | Governments worldwide have pledged around $3 trillion as part of efforts to stem the financial crisis. |
| Philippines President Gloria Macapagal Arroyo said the World Bank had committed to provide the Asian fund with $10bn | |
| She said that the Asian Development Bank and the International Monetary Fund may also contribute to the fund as well as the 10-member Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea. | She said that the Asian Development Bank and the International Monetary Fund may also contribute to the fund as well as the 10-member Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea. |