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Euro stocks edge up on rate hope Euro stocks edge up on rate hope
(about 2 hours later)
European stocks were ahead in early trade, spurred by hopes of an interest rate cut by the US Federal Reserve to help calm recent market volatility. European stocks have risen in morning trade, spurred by hopes of an interest rate cut by the US Federal Reserve to help calm recent market volatility.
Shortly after opening, the London FTSE was ahead by 0.80%, the Frankfurt Dax up by 0.54%, and the Paris Cac by 1%. By late morning, both the London FTSE 100 and the Frankfurt Dax were ahead by 0.8%, while the Paris Cac was up 1.2%.
It came as leading shares in China, Hong Kong, Singapore and Seoul rose, but Japan's Nikkei index fell lightly. Earlier on Wednesday, markets in Hong Kong, China and Singapore rose, while Japan's Nikkei ended barely changed.
Hopes of a US rate cut came after a US senator said the Fed would use "all available tools" to calm credit fears.Hopes of a US rate cut came after a US senator said the Fed would use "all available tools" to calm credit fears.
Recent market turmoil has been prompted by problems in the US mortgage market.Recent market turmoil has been prompted by problems in the US mortgage market.
But some analysts in Asia think the worst of the recent volatility is over.But some analysts in Asia think the worst of the recent volatility is over.
"Fears about the fallout from the US sub-prime mortgage sector are receding. Last week's drops appear overdone," said Lee Woo-hyun, an analyst at Kyobo Securities."Fears about the fallout from the US sub-prime mortgage sector are receding. Last week's drops appear overdone," said Lee Woo-hyun, an analyst at Kyobo Securities.
"The markets are likely to continue the rebound.""The markets are likely to continue the rebound."
'Some comfort''Some comfort'
Recent falls in shares worldwide have come in the wake of problems in the US sub-prime mortgage market, the sector that lends to people with poor credit records or who are on lower incomes.Recent falls in shares worldwide have come in the wake of problems in the US sub-prime mortgage market, the sector that lends to people with poor credit records or who are on lower incomes.
A rise in defaults on home loans in the sub-prime market has raised fears that it will become harder for homebuyers and businesses to get loans, which could hamper investment and growth.A rise in defaults on home loans in the sub-prime market has raised fears that it will become harder for homebuyers and businesses to get loans, which could hamper investment and growth.
The stock market falls have led to many investors seeking to put their money into safer financial instruments, such as government bonds.The stock market falls have led to many investors seeking to put their money into safer financial instruments, such as government bonds.
Asian markets reacted well to comments made by US Senate Banking Committee chairman Senator Christopher Dodd after he had met Federal Reserve head Ben Bernanke and Treasury Secretary Henry Paulson.Asian markets reacted well to comments made by US Senate Banking Committee chairman Senator Christopher Dodd after he had met Federal Reserve head Ben Bernanke and Treasury Secretary Henry Paulson.
Mr Dodd said that Mr Bernanke "intends to utilise all the tools available to him" to try to prevent US housing and credit problems from worsening.Mr Dodd said that Mr Bernanke "intends to utilise all the tools available to him" to try to prevent US housing and credit problems from worsening.
Japanese investors remain wary however ahead of a key Bank of Japan meeting on Thursday, which will decide whether to raise interest rates or not.Japanese investors remain wary however ahead of a key Bank of Japan meeting on Thursday, which will decide whether to raise interest rates or not.
"The fact that the US stock market has stabilised to an extent gives investors some comfort," said Katsuhiko Hiroshige, an analyst at Traders & Co in Tokyo."The fact that the US stock market has stabilised to an extent gives investors some comfort," said Katsuhiko Hiroshige, an analyst at Traders & Co in Tokyo.
But, he added, "it will be a while before investor sentiment recovers completely from the trauma of recent losses".But, he added, "it will be a while before investor sentiment recovers completely from the trauma of recent losses".