This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-29656262
The article has changed 3 times. There is an RSS feed of changes available.
Version 1 | Version 2 |
---|---|
US shares end on a high as European stock markets rebound | |
(about 7 hours later) | |
Shares in Europe and US have rebounded after a turbulent week in which stock markets tumbled to multi-month lows. | |
On Friday US stocks closed more than 1% up, with the S&P 500 posting its biggest gain in more than a week. | |
Europe's main indexes closed higher, having fallen sharply over concerns that the global economic recovery was running out of steam. | |
Despite the rises, Charles Stanley's Jeremy Batstone-Carr saying: "I'm not sure we're out of the woods." | |
Poor economic and corporate data, along with worries about the impact of the Ebola crisis, had sent stock markets into a nosedive. | |
On Friday, London's FTSE 100 closed 1.85% up at 6,310.29 points, while bourses in Paris and Frankfurt ended 3% ahead. | |
The FTSE 100 had fallen 10% since early September, wiping £175bn off the value of listed businesses. | The FTSE 100 had fallen 10% since early September, wiping £175bn off the value of listed businesses. |
Wall Street's Dow Jones index closed 263.1 points up, or 1.63%, to 16,380.34, while the S&P 500 gained 23.98 points, or 1.3%, to 1,886.74. | |
'Turbulence' | 'Turbulence' |
Explaining the recent convulsions in the markets, Carl Weinberg, chief economist and managing director at New York-based consultancy High Frequency Economics, said investors had taken fright over the faltering European economy and a slew of weaker global economic data. | Explaining the recent convulsions in the markets, Carl Weinberg, chief economist and managing director at New York-based consultancy High Frequency Economics, said investors had taken fright over the faltering European economy and a slew of weaker global economic data. |
Some "untested" economic indicators had given the impression the European market was recovering when it was not, Mr Weinberg argued. | Some "untested" economic indicators had given the impression the European market was recovering when it was not, Mr Weinberg argued. |
"The underlying economy is as bad now as it was a week or two weeks ago," he told the BBC. | "The underlying economy is as bad now as it was a week or two weeks ago," he told the BBC. |
"But the perceptions have changed and that's causing turbulence in the markets." | "But the perceptions have changed and that's causing turbulence in the markets." |
Steven Saywell, head of foreign exchange strategy at BNP Paribas, said the real concern over the faltering eurozone economy was inflation, currently running at 0.3%. | Steven Saywell, head of foreign exchange strategy at BNP Paribas, said the real concern over the faltering eurozone economy was inflation, currently running at 0.3%. |
"We believe the risk is it could fall even further," he said. | "We believe the risk is it could fall even further," he said. |
BNP Paribas believes European Central Bank president Mario Draghi should take bold measures to buy sovereign bonds in an attempt to convince investors that the rate of inflation would increase. | BNP Paribas believes European Central Bank president Mario Draghi should take bold measures to buy sovereign bonds in an attempt to convince investors that the rate of inflation would increase. |
'Market needs volatility' | 'Market needs volatility' |
This period of volatility was no worse than it had been in the past, Mr Weinberg maintained, and was a necessary condition if markets were "to make money". | This period of volatility was no worse than it had been in the past, Mr Weinberg maintained, and was a necessary condition if markets were "to make money". |
In recent years, central banks maintaining a policy of low interest rates had dampened market speculation, but now that it was a question of when rates would rise, rather than whether, this was stimulating investor activity, Mr Weinberg argued. | In recent years, central banks maintaining a policy of low interest rates had dampened market speculation, but now that it was a question of when rates would rise, rather than whether, this was stimulating investor activity, Mr Weinberg argued. |
But such speculation was countered by recent comments from Andrew Haldane, the Bank of England's chief economist. | But such speculation was countered by recent comments from Andrew Haldane, the Bank of England's chief economist. |
He said UK interest rates should remain low to avoid long-term economic stagnation, after giving a downbeat assessment of the UK economy. | He said UK interest rates should remain low to avoid long-term economic stagnation, after giving a downbeat assessment of the UK economy. |
Weaker global growth, low wage growth and financial and political risks contributed to his more cautious view. | Weaker global growth, low wage growth and financial and political risks contributed to his more cautious view. |
"This implies interest rates could remain lower for longer, certainly than I had expected three months ago," he said in a breakfast meeting speech to business leaders. | "This implies interest rates could remain lower for longer, certainly than I had expected three months ago," he said in a breakfast meeting speech to business leaders. |