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Shares volatile on economy fears | |
(about 2 hours later) | |
Wall Street shares made cautious gains in rocky trading on expectations that further rate cuts could lend further support for the US economy. | |
By midday, the key Dow Jones index was up 0.6% or 78.77 points to 12,286, while the S&P 500 was also ahead. | |
But worries over economic growth in Europe and fears over the health of the banking sector after a fraud at Societe General hit shares in the region. | |
The UK's FTSE 100 closed 1.3% lower, while France's Cac was down 0.6%. | |
Germany's Dax index meanwhile reversed earlier losses to finish at almost the same level as at Friday's close, up 0.03% at 6,818.85. | |
Analysts said investors were cautious ahead of a Federal Reserve meeting on Wednesday, at which the central bank is expected to cut rates. | |
In Japan, the Nikkei 225 had earlier finished the day's trading down 4%. | In Japan, the Nikkei 225 had earlier finished the day's trading down 4%. |
Hong Kong's Hang Seng index closed down 4.3%, while Mumbai's Sensex finished 1.1% lower. | Hong Kong's Hang Seng index closed down 4.3%, while Mumbai's Sensex finished 1.1% lower. |
'No appetite' | 'No appetite' |
Analysts said despite the falls in some markets, the mood seemed calmer after last week's sharp ups and downs. | |
The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision Koichi Ogawa, Daiwa SB Investments | The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision Koichi Ogawa, Daiwa SB Investments |
Last week began with sharp stock market falls on growing worries over the US economy, only for them to recover later in the week by a $150bn (£76bn) stimulus plan agreed between the US Congress and the Bush administration. | |
"Investors don't have the appetite to buy stocks now," said Francis Lun, general manager at Fulbright Securities in Hong Kong. | "Investors don't have the appetite to buy stocks now," said Francis Lun, general manager at Fulbright Securities in Hong Kong. |
"The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo. | "The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo. |
Uncertainty | Uncertainty |
Many analysts are expecting the Federal Reserve, the US's central bank, to cut interest rates again when it makes its next scheduled decision on Wednesday. | Many analysts are expecting the Federal Reserve, the US's central bank, to cut interest rates again when it makes its next scheduled decision on Wednesday. |
Last week it reduced rates to 3.5% from 4.25% in an emergency move. | Last week it reduced rates to 3.5% from 4.25% in an emergency move. |
Analysts are also waiting for any further economic details in President Bush's State of the Union address late on Monday. | Analysts are also waiting for any further economic details in President Bush's State of the Union address late on Monday. |
"There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy," said Rob Hart, an analyst with Morgan Stanley in Hong Kong. | "There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy," said Rob Hart, an analyst with Morgan Stanley in Hong Kong. |
"People are also worried about contagion in Europe," he added. | "People are also worried about contagion in Europe," he added. |
"If the US slows down, will it trigger a slowdown in Europe?" | "If the US slows down, will it trigger a slowdown in Europe?" |