Volatile Trading Across Markets

Global shares were volatile in Friday trading
(after Thursday’s heavy losses on Wall Street)

However analysts said markets had been shored-up by hopes President Bush would propose measures to boost the economy.

London’s FTSE 100 shook off early losses to add 15 or 65 points in morning trading, though French & German markets remained low.

Japan’s Nikkei 225 index closed 0.6% up, having been 3% down earlier.

The Nikkei ended at 13,861.29 while Hong Kong’s Hang Seng index also recovered from a 3.7% early slump to finish Friday trading up 0.4%.

However India’s Sensex fell 3.5% to close at 19,005.74 points.

Recovery package
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.

The heavy US losses came despite hints from Federal Reserve boss Ben Bernanke that more interest rate cuts were in the pipeline to shore up the economy and Merrill Lynch reporting the biggest quarterly loss in its history also hit markets.

The FTSE 100 index added 5,67.4 points by 1045GMT, while France’s Cac index lost 0.1% and Germany’s Dax shed 0.2%.

‘No short-termism’
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".

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.

"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.

Analysts said that the president’s announcement would be watched by the markets with interest. "Whether the stimulus package will be sufficient or not, we don’t know at this point, but how deep the US slowdown is will be the more critical part," said United Overseas Bank analyst Suan Teck Kin.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7195372.stm

Published: 2008/01/18 11:15:39 GMT

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