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| Markets gain on US shares rebound | Markets gain on US shares rebound |
| (about 1 hour later) | |
| US shares have rebounded from Tuesday's heavy falls, with the Dow Jones index gaining 1.3% as investors looked to pick up bargains. | US shares have rebounded from Tuesday's heavy falls, with the Dow Jones index gaining 1.3% as investors looked to pick up bargains. |
| There are increased hopes the Federal Reserve will cut rates, analysts said. | There are increased hopes the Federal Reserve will cut rates, analysts said. |
| The news dragged European shares higher after a day of mixed trading as US housing and credit woes continued to cast a shadow over stock markets. | The news dragged European shares higher after a day of mixed trading as US housing and credit woes continued to cast a shadow over stock markets. |
| The UK's FTSE 100 closed 0.5% ahead at 6,132.2 while Germany's Dax was 0.1% up after trailing for most of the day. | The UK's FTSE 100 closed 0.5% ahead at 6,132.2 while Germany's Dax was 0.1% up after trailing for most of the day. |
| Earlier on Tuesday, Japan's main Nikkei index closed down 275 points, or 1.7%, at 16,013. | Earlier on Tuesday, Japan's main Nikkei index closed down 275 points, or 1.7%, at 16,013. |
| Rate cut hope | Rate cut hope |
| The Dow Jones was up 162.6 points at 13,204.2 by mid-afternoon on Wednesday, having closed 280 points, or 2.1% down, on Tuesday. | The Dow Jones was up 162.6 points at 13,204.2 by mid-afternoon on Wednesday, having closed 280 points, or 2.1% down, on Tuesday. |
| Meanwhile the Nasdaq added 1.5% to 2,539.03. | Meanwhile the Nasdaq added 1.5% to 2,539.03. |
| Analysts said that investors hoped the volatility on global markets would be eased if, as many expect, the US Federal Reserve cuts interest rates next month. | Analysts said that investors hoped the volatility on global markets would be eased if, as many expect, the US Federal Reserve cuts interest rates next month. |
| "The market is a little oversold, and bargain hunters are coming into the equation," said Weeden & Co strategist Steve Goldman. | "The market is a little oversold, and bargain hunters are coming into the equation," said Weeden & Co strategist Steve Goldman. |
| We need more momentum...in order to start reversing some of yesterday's awful losses Peter DixonAnalyst, Commerzbank Market jitters and your wallet | We need more momentum...in order to start reversing some of yesterday's awful losses Peter DixonAnalyst, Commerzbank Market jitters and your wallet |
| "The market is also getting closer to when the Fed will lower rates." | "The market is also getting closer to when the Fed will lower rates." |
| Tuesday's fall came after another warning about the impact of the problems in global credit markets - centred on the crisis in the US sub-prime mortgage sector - from investment bank Merrill Lynch. | Tuesday's fall came after another warning about the impact of the problems in global credit markets - centred on the crisis in the US sub-prime mortgage sector - from investment bank Merrill Lynch. |
| The bank downgraded its opinion of stocks in three firms exposed to the sub-prime sector - Bear Stearns, Lehman Brothers and Citigroup. | The bank downgraded its opinion of stocks in three firms exposed to the sub-prime sector - Bear Stearns, Lehman Brothers and Citigroup. |
| "We need more momentum I think in order to start reversing some of yesterday's awful losses," said Commerzbank economist Peter Dixon. | "We need more momentum I think in order to start reversing some of yesterday's awful losses," said Commerzbank economist Peter Dixon. |
| The sub-prime mortgage sector gives higher risk loans to people with poor credit histories. | The sub-prime mortgage sector gives higher risk loans to people with poor credit histories. |
| Sub-prime default levels have risen to record highs in the US over the past year in the face of higher mortgage rates. | Sub-prime default levels have risen to record highs in the US over the past year in the face of higher mortgage rates. |
| This has raised fears that this could hamper credit availability in the broader market, not just in America, but around the world. | This has raised fears that this could hamper credit availability in the broader market, not just in America, but around the world. |
| On Wednesday, Australian-run investment fund, the Basis Yield Alpha Fund, became the latest victim of the housing slump. | |
| It filed for bankruptcy protection in the US after suffering heavy losses. |