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Markets mixed after Fed rate cut Markets mixed after Fed rate cut
(10 minutes later)
Europe's major stock markets were mixed after strong gains in Asia, and Wall Street's surge higher overnight. Europe's major stock markets gave up early strong gains, as banking stocks came under severe pressure.
By 0911 GMT London's FTSE 100 was down 11 points, in Frankfurt the Dax was up just 3 points and in Paris the Cac 40 was 6 points higher. By 0930 GMT London's FTSE 100 was down 29 points, in Frankfurt the Dax was up just 15 points and in Paris the Cac 40 was 20 points lower.
Those exchanges started the session with healthy gains following Tuesday's decision by the US Federal Reserve to cut interest rates by 0.75%. UK based HBOS slumped as much as 17% before recovering. HSBC was down 3%.
The exchanges started the session with healthy gains following Tuesday's decision by the US Federal Reserve to cut interest rates by 0.75%.
In Asia, markets recovered strongly after the Fed's move.
In Japan the Nikkei jumped 2.5%, while shares in Australia rose 4%.In Japan the Nikkei jumped 2.5%, while shares in Australia rose 4%.
India and South Korea rose by 2%.India and South Korea rose by 2%.
Wall Street
On Wall Street on Tuesday, the Dow Jones stock index recovered from recent losses and registered its biggest one-day gain for more than five years.On Wall Street on Tuesday, the Dow Jones stock index recovered from recent losses and registered its biggest one-day gain for more than five years.
The Fed's action was aimed at averting panic after the cut-price takeover of troubled investment bank Bear Stearns.The Fed's action was aimed at averting panic after the cut-price takeover of troubled investment bank Bear Stearns.
It was forced into a fire sale to rival JP Morgan Chase for a fraction of its value, in order to avoid collapse.It was forced into a fire sale to rival JP Morgan Chase for a fraction of its value, in order to avoid collapse.
HAVE YOUR SAYThe people who got into trouble are those that bought houses beyond their meansMarcus, ColombiaSend us your commentsBear Stearns has been one of the highest-profile victims of the subprime mortgage crisis, and subsequent global credit crunch.HAVE YOUR SAYThe people who got into trouble are those that bought houses beyond their meansMarcus, ColombiaSend us your commentsBear Stearns has been one of the highest-profile victims of the subprime mortgage crisis, and subsequent global credit crunch.
US Treasury Secretary Henry Paulson admitted on Tuesday that the US economy was currently facing a "sharp decline", but hoped for a recovery later in the year.US Treasury Secretary Henry Paulson admitted on Tuesday that the US economy was currently facing a "sharp decline", but hoped for a recovery later in the year.
The Fed has now lowered rates six times since mid-September, with the economy reeling from a credit crisis triggered by a slump in the US housing market.The Fed has now lowered rates six times since mid-September, with the economy reeling from a credit crisis triggered by a slump in the US housing market.
Losses recoupedLosses recouped
Japan's benchmark Nikkei index fell to a 31-month low on Monday.Japan's benchmark Nikkei index fell to a 31-month low on Monday.
The Federal Reserve has stepped in to try and stave off recessionThe Federal Reserve has stepped in to try and stave off recession
But by the end of morning trading on Wednesday, a substantial amount of those losses had been recouped, says the BBC's Chris Hogg in Tokyo.But by the end of morning trading on Wednesday, a substantial amount of those losses had been recouped, says the BBC's Chris Hogg in Tokyo.
Japanese banks, whose share prices were damaged by the credit crunch, performed well in early trading.Japanese banks, whose share prices were damaged by the credit crunch, performed well in early trading.
The nerves of Japanese bank sector investors were soothed by better than expected results from two big US institutions on Tuesday.The nerves of Japanese bank sector investors were soothed by better than expected results from two big US institutions on Tuesday.
Goldman Sachs and Lehman Brothers, reported smaller falls in profits than analysts had been expecting.Goldman Sachs and Lehman Brothers, reported smaller falls in profits than analysts had been expecting.
But analysts are warning of more volatility ahead, our correspondent says.But analysts are warning of more volatility ahead, our correspondent says.