Wednesday 24 January 2018

Euro stocks bounce back as China fears ease

Investors sit in front of an electronic board showing stock information at a brokerage house in Zhongshan, Guangdong province, China
Investors sit in front of an electronic board showing stock information at a brokerage house in Zhongshan, Guangdong province, China

EUROPEAN shares rebounded today as trader talk of possible market calming moves in China led some investors to cover their negative bets on equities, and with technical charts offering some support to the market.

The pan-European FTSEurofirst 300 index was up 0.8pc to 1,122.44 points at 0707 GMT, having shed 5.5pc in the previous three sessions on concerns about a money market squeeze in China and expected curbing of US economic stimulus .

The index was taking its cue from a late recovery in Asian shares outside Japan, with traders attributing the move to talk Chinese monetary authorities may use a press conference later today to hint at new policy moves.

"We've just a bunch of client calls coming in with people covering their shorts and it seems it's Asia doing it," said Ishaq Siddiqi, strategist at ETX Capital.

Short sellers borrow a security and sell it, betting they will be able to buy it back at a lower price before returning it to the lender, pocketing the difference.

Reuters

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