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Stock markets in Europe and the US bounce back after sell-off | |
(about 2 hours later) | |
Europe's stock markets bounced back on Thursday, a day after billions were wiped off the value of shares amid global market turmoil. | |
London's FTSE 100 index of leading shares closed up nearly 1.77%, while the main markets in France and Germany rose 1.97% and 1.94%. | |
Confidence was boosted when the head of Europe's central bank promised action to steady the eurozone if necessary. | |
It offset fears about the falling oil price and worries about global growth. | |
In the US, shares also recovered from losses the previous day, with traders saying that some investors believed the market was over-sold. | |
About half-way through Wall Street's trading session, the Dow Jones was up 1.54% and the S&P 500 was 1.46% ahead. | |
Much earlier, Japan's main share index closed down by more than 2%. | Much earlier, Japan's main share index closed down by more than 2%. |
On Wednesday, global stock markets suffered hefty losses and London's FTSE 100 ended the day down 3.5%. | |
By doing so it entered a "bear market", having fallen 20% from its record high in April last year. | By doing so it entered a "bear market", having fallen 20% from its record high in April last year. |
Oil market | Oil market |
Comments by European Central Bank president Mario Draghi helped to steady investors' nerves. | |
He hinted that the ECB could do more to stimulate the eurozone economy, saying there were "no limits" to action if necessary. | |
The oil price also recovered, although it remains at around 12-year lows. | |
Brent crude rose 5.9% to $29.52 a barrel. In the US, West Texas Intermediate Crude rose 5.3% briefly breaking back above $30 a barrel before settling at $29.79. | |
Oil prices have been falling since mid 2014, but oil-producing countries have maintained output despite the decline, contributing to the excess supplies on the market. | |
Earlier in the week, the International Energy Agency warned that oil markets could "drown in oversupply" in 2016. | Earlier in the week, the International Energy Agency warned that oil markets could "drown in oversupply" in 2016. |
'Good shape' | 'Good shape' |
Patrick Thomson from JP Morgan Asset Management told the BBC that investors should not panic. | Patrick Thomson from JP Morgan Asset Management told the BBC that investors should not panic. |
"If you look at the US economy particularly, that is actually in pretty good shape," he said. | "If you look at the US economy particularly, that is actually in pretty good shape," he said. |
"You look at all of the data coming out recently, clearly growth is a little muted and corporate earnings are somewhat lower than expected due to energy prices and the strong dollar, but underlying fundamentals, particularly the US consumer, is in very good shape." | "You look at all of the data coming out recently, clearly growth is a little muted and corporate earnings are somewhat lower than expected due to energy prices and the strong dollar, but underlying fundamentals, particularly the US consumer, is in very good shape." |
That message was echoed by analysts Capital Economics, which said: "Despite the prevailing gloom about the world economy, we think global growth will pick up from around 2.5% last year to 3% in both 2016 and 2017, using our own estimates for China." | That message was echoed by analysts Capital Economics, which said: "Despite the prevailing gloom about the world economy, we think global growth will pick up from around 2.5% last year to 3% in both 2016 and 2017, using our own estimates for China." |