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Bourses Update

  • August 18th, 2007
  • Posted by EUEditor

euro-symbol-reduced4.jpgThe week’s end on European stock exchanges (17.8.07) saw afternoon rallies on Friday like the recovery on Wall Street, after action by the US Federal Reserve Board.

The Federal Reserve reduced the Discount interest rate which it charges to major banks (0.5%), and injected a further $US6 billion (A$7.53-billion; Dcerates.com, 18.8.07) into financial markets to assist with liquidity.

It had been a volatile morning in other places, with, in Tokyo, a 5% drop in the Nikkei index marking the scale of losses that had begun to occur on Asian markets.

The CAC French stock market index finished 1.86% up on Friday, the Financial Times London index (FTSI) up 3.5% and the DAX at Frankfurt up 1.49%.

Analysts or traders were being quoted as watchful about the turn-around, considering the strength of earlier fears that volatility on stock exchanges, brought on by failing home loans, would spread widely to other areas of economic activity.

Typically, Manoj Ladwa in Le Monde: “Traders are waiting it out. Nobody really believes we have got to the bottom. Everybody’s waiting to see what happens next.”

(“Les traders sont attentistes. Personne ne croit vraiment qu’on a touché le fond. Tout le monde attend de voir”).

Reference:

La Réserve fédérale américaine rassure les marches“, Le Monde, Paris, 17.8.07. www.lemonde.fr (18.8.07) (Federal Reserve reassures the markets)

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