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REUTERS
LONDON, Sept 2: European share markets opened with some impressive gains on Wednesday after Wall Street's rebound overnight sparked some strong gains in Asia in spite of worries about whether the rally could be sustained.
Of Europe's big three bourses, London rose the most, showing a gain of around three per cent. Stocks in Frankfurt and Paris rose 2.8 and 2.3 per cent respectively and the story was similar across the rest of continental Europe. "But (London's rebound) is likely to be followed by an ominous silence while we wait for Wall Street," one trader in London said. "People will still be feeling twitchy."
Technical analysts saw London's FTSE index of leading shares recovering to the 5,400 point level in the short-term after opening at 5,219.7. German shares extended their early gains with the Xetra DAX vaulting the key 5,000 level to 5.005.84 before slipping back below 5,000. German dealers remained cautious despite the gains.
The mood was similar in Paris where Gerard Augustin-Normand, presidentof Richelieu Finance, said: "This morning we're following Wall Street but we're not feeling completely relaxed. This is a convalescence. Buyers are looking but they're hesitant to come into the market." US stocks overnight reclaimed more than half of Monday's massive loss, as investors dumped bonds to snap up bargains on the NYSE's busiest trading day ever. The Dow Jones industrial average ended up 288.36 points, or 3.8 per cent, at 7,827.43, its second biggest points gain and a dramatic rebound from Monday's 513-point slide, its second biggest points loss. The rebound spanned a trading range of some 500 points in high volume.
After their big gains of recent day, German government bonds and futures opened weaker and British gilts followed suit. Tokyo stocks finished only marginally higher after losing most of their earlier gains, but Hang Seng ended up more than 4 per cent. Malaysian markets sprinted nearly 11 per cent to lead a Southeast Asian rall. Moves in the dollar were calm in early European tradeafter Wall Street's rebound heaved the US currency up after it hit a nine-month low on Tuesday. However, traders said dollar bulls were still holding back as the Dow Jones rally had not convinced the market it had weathered the worst of the recent global stock market trauma.
The dollar was up around 0.7 per cent from Tuesday's nine-month low of 1.7360 against the mark but off an early high of 1.7550. Against the yen it was up nearly two per cent from Tuesday's 10-week low of 134.95. But here, too, it was off its earlier high of 138.07. "After the (dollar's) rebound people are starting to take profits and looking for good levels to sell.
People are far from convinced the stock markets' problems are over," said one trader at a US bank in London. "Still, it hasn't moved all that much in Europe this morning, it's pretty quiet as people are digesting what has happened," he added. And while the market was still very nervous about the political situation in Russia, traders said it was not affecting currencies atthe moment as President Boris Yeltsin and parliament remained in deadlock over Yeltsin's choice of Viktor Chernomyrdin as prime minister.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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