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Markets volatile after US slump Markets volatile after US slump
(about 2 hours later)
Asian shares slid heavily on the back of heavy Wall Street losses prompted by further fears of a US recession. Global shares were mixed in Friday trading following heavy losses overnight on Wall Street prompted by further fears of a US recession.
However, Japan's Nikkei 225 index clawed back lost ground on hopes President Bush would propose measures to boost the flagging US economy. Japan's Nikkei 225 index rose 78 points on hopes President Bush will propose measures to boost the US economy.
However key London, Paris and Frankfurt markets were lower in early trading.
Weak manufacturing data and big losses from Merrill Lynch had seen the main US index, the Dow Jones, fall 2.46% or 306.95 points to 12,159.21 on Thursday.
Stimulus that comes too late will not help support economic activity in the near term Ben BernankeFederal reserve chairman Fed backs kick-start
The Nikkei, which had lost 3% in early trading, ended 0.6% ahead at 13,861.29.The Nikkei, which had lost 3% in early trading, ended 0.6% ahead at 13,861.29.
Weak manufacturing data and big losses from Merrill Lynch had seen the benchmark Dow Jones average fall 2.46% or 306.95 points to close at 12,159.21. Hong Kong's Hang Seng index also recovered from a 3.7% early slump to finish Friday trading up 0.4% to 25,202.
Stimulus that comes too late will not help support economic activity in the near term Ben BernankeFederal reserve chairman Fed backs economy kick-start
While Japanese shares recovered, Hong Kong's Hang Seng Index was still trading behind, though it erased some of its 3.7% early slump to be 1.2% down at 24,808.0 by midday local time.
Recovery packageRecovery package
Analysts were expecting European shares to also open lower on the back of the heavy US losses. Analysts had been expecting European shares to also open lower on the back of the heavy US losses, which came despite hints from Federal Reserve boss Ben Bernanke that more interest rate cuts were in the pipeline to shore up the economy.
Merrill Lynch shares dropped 10.2% to $49.45 after the firm reported the biggest quarterly loss in its history. And Merrill Lynch reporting the biggest quarterly loss in its history also hit markets.
It made a net loss of $7.8bn (£3.9bn) in the 12 months to the end of December from a net profit of $7.5bn in 2006. The FTSE 100 index slipped 0.4% to 5,878.6 points by 0850GMT, while France's Cac index lost 0.33% and Germany's Dax shed 0.5%.
In the final three months of 2007 alone, it chalked up losses of $9.83bn
The Standard & Poor's 500 Index was down 39.95 points, or 2.91%, at 1,333.25, a 15-month low, while the tech-heavy Nasdaq Composite Index was down 47.69 points, or 1.99%, at 2,346.90.
The steep falls came despite hints from Federal Reserve boss Ben Bernanke that more interest rate cuts were in the pipeline to shore up the economy.
'Quick action'
Later on Friday, President Bush is set to make his first public call for emergency legislation to stimulate the flagging economy.Later on Friday, President Bush is set to make his first public call for emergency legislation to stimulate the flagging economy.
A White House spokesman said the president would "let the American people know that he does believe that short-term temporary measures are needed to help the economy through this period".A White House spokesman said the president would "let the American people know that he does believe that short-term temporary measures are needed to help the economy through this period".
Federal Reserve chairman Ben Bernanke has backed the introduction of emergency measures aimed at helping the US economy avoid recession.Federal Reserve chairman Ben Bernanke has backed the introduction of emergency measures aimed at helping the US economy avoid recession.
Speaking to the House Budget Committee Mr Bernanke said that any measures such as tax cuts should happen quickly, and on a temporary basis to be effective.Speaking to the House Budget Committee Mr Bernanke said that any measures such as tax cuts should happen quickly, and on a temporary basis to be effective.
"Stimulus that comes too late will not help support economic activity in the near term, and it could be actively destabilising if it comes at a time when growth is already improving," he warned."Stimulus that comes too late will not help support economic activity in the near term, and it could be actively destabilising if it comes at a time when growth is already improving," he warned.