This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6950731.stm

The article has changed 36 times. There is an RSS feed of changes available.

Version 23 Version 24
US rate cut boosts global markets US rate cut boosts global markets
(about 2 hours later)
Wall Street shares opened sharply higher on the news that the Federal Reserve was cutting the interest rate at which it lends money to banks. UK shares swung firmly back into positive territory following the US Federal Reserve's move to cut the rate at which it lends to banks.
After an hour, the Dow Jones had fallen back and was only up 1.10% at 12,986.7. The decision, designed to increase the flow of money in the US financial system, saw London's FTSE 100 jump 3.5% or 205.3 points to 6,064.2.
The news also boosted European markets. At 1530 BST the FTSE 100 was up 3.25%, Frankfurt's Dax was up 1.88% and the Cac 40 in Paris' was up 3.37%. Relief was also felt in Wall Street, where shares opened sharply higher, and elsewhere in Europe.
All three European indexes had been jumping between positive and negative territory throughout the day's trading. After an hour, the Dow Jones had fallen back and was up just 1.1% at 12,986.7.
The technology-based Nasdaq was up 1.1% at 2,478.1.The technology-based Nasdaq was up 1.1% at 2,478.1.
At the end of the day in Europe, Frankfurt's Dax was up 1.49%, while the Cac 40 in Paris closed 1.86% higher.
All three main European indexes had veered in and out of the red throughout the day's trading.
See long term trends among the major stock market indexes See long term trends among the major stock market indexes
The Fed's rate cut is intended to help with the liquidity problems facing many banks following the US housing slump.The Fed's rate cut is intended to help with the liquidity problems facing many banks following the US housing slump.
Europe's markets had been having a shaky day after big falls on Asian stock markets. On Thursday, London's FTSE 100 fell 4.1%, cutting almost £60bn off the value of Britain's top companies.
Japan's Nikkei fell 5.42%, its biggest points fall since April 2000, while Hong Kong's Hang Seng fell 1.38%. Wait and see
It comes the day after London's FTSE 100 fell 4.1%, cutting almost £60bn off the value of Britain's top companies. The recent worldwide slide in share prices was triggered by problems in the US mortgage market.
Central banks intervene The problems centre on the sub-prime sector, which offers higher-risk loans to people with a poor credit history.
Other central banks had also been busy. As US interest rates have risen and the housing bubble has burst, a growing number of sub-prime borrowers have defaulted on their loans.
Because the lenders have often sold on the debt, this has led to extensive financial difficulties for a number of investment funds with heavy exposure to the sector - prompting fears of a wider financial crisis.
The worry for many analysts is that stock market declines will resume next week, wiping even more money off the value of pension funds and global stock markets.
Analysts said there was no guarantee that Friday's upward trend would be maintained when trading resumed after the weekend.
Asian losses
The European share recovery followed big falls on Asian stock markets.
Japan's Nikkei declined 5.42%, its biggest points fall since April 2000, while Hong Kong's Hang Seng closed 1.38% lower.
The Bank of Japan injected 1.2 trillion yen ($10.7 billion; £5.4bn) into money markets, which was its third intervention of the week.The Bank of Japan injected 1.2 trillion yen ($10.7 billion; £5.4bn) into money markets, which was its third intervention of the week.
Japanese investors are worried that a slowdown in the US economy will hit exports from Asia.Japanese investors are worried that a slowdown in the US economy will hit exports from Asia.
There is also speculation that the Bank of Japan could raise interest rates next week, despite the problems on the market.There is also speculation that the Bank of Japan could raise interest rates next week, despite the problems on the market.
Elsewhere, the Australian central bank intervened to support its currency for the first time for six years.Elsewhere, the Australian central bank intervened to support its currency for the first time for six years.
The Australian dollar was facing its biggest one day fall against the US dollar since it was allowed to trade freely in 1983.The Australian dollar was facing its biggest one day fall against the US dollar since it was allowed to trade freely in 1983.
US Recovery
On Thursday, Wall Street saw the Dow Jones claw back more than 300 points of its losses in the last hour of trading.
US shares were helped by rumours that Bear Stearns, which is heavily exposed to the mortgage sector, could get funding from a Chinese bank.
Also, there were suggestions that the government-sponsored lender Fannie Mae might be allowed to pump extra funds into the mortgage market.
Fannie Mae said its talks with regulators about increasing the amount it is allowed to invest in home loans are continuing.
MAJOR SHARE INDEXES OVER THE PAST YEARMAJOR SHARE INDEXES OVER THE PAST YEAR
Return to topReturn to top