Debt crisis: European markets rally but focus on US Fed moves
Most European shares bounced back today before closing on hopes of an announcement from the US Federal Reserve that will calm markets nervous about global debt and a double dip recession.
London’s FTSE 100 index rose 1.9pc to 5,164.90 snapping out of it’s year lows while the mood was better in the US too.
France’s CAC-40 finished up 1.63pc while Germany’s DAX closed down under 0.5pc.
But all eyes are on the US ahead of a statement from Federal Reserve chief Ben Bernanke which will determine the direction US markets will take later.
If it doesn’t contain plans to prevent further meltdown it could spark a new sell-off as investors are looking for signs that the US government is willing to fight another stock market slump.
US Fed chief Ben Bernanke could signal that the US Government is willing to pump more money into the economy in a strategy that is called quantitative easing (QE3).
When the European markets closed, the Dow Jones Industrial average was up 1.99pc at 11,018.88.
The Nasdaq was also more upbeat and was at 2,438.89 – a 3.4pc increase late this afternoon.
US stocks had earlier gained on opening in a rebound from the nosedive yesterday.
Louise Cooper, an analyst at BGC Partners, said: "Equity markets are fearing a double-dip recession.
"Economic growth can be affected by share price falls because essentially it makes businesses fearful for the future.
"And it affects ordinary people as well if your pension fund that you may have spent 10 or 20 years saving for has effectively gone down 10pc or 20pc in days."
The price of gold continued to soar to highs of $1,772 per ounce as it was seen as a safe haven amid the chaos.
But oil prices, which are often seen as an indicator of optimism in the global economy, rose late after Brent crude had at one point slipped below $100 per barrel - a level not seen since February.
(Additional reporting Press Association)