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World stocks rise as fears recede | |
(about 3 hours later) | |
European and Asian stocks rose on Wednesday as investors hoped that the worst of the credit crisis may be over. | |
Strong demand for a Lehman Brothers share offering, despite fears it could face similar problems to troubled rival Bear Stearns, boosted confidence. | Strong demand for a Lehman Brothers share offering, despite fears it could face similar problems to troubled rival Bear Stearns, boosted confidence. |
In Europe, the Paris Cac was up 0.11% and the Frankfurt Dax up 0.18%. Hong Kong's Hang Seng index jumped 4.4% and Japan's Nikkei 225 index was up 3.7%. | |
The rise came after the US Dow Jones index hit a one-month high on Tuesday. | |
'Concerns easing gradually' | |
"Investors believe the credit crisis in the US is over," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. | |
"They think the worst has gone." | "They think the worst has gone." |
This week, US investment bank Lehman Brothers and Switzerland's UBS have revealed new share issues to repair their balance sheets, with both actions being well received by markets. | |
"Worries about the global credit market and the health of the US economy had been stifling investors," said Kim Sung-Bong, an analyst at Samsung Securities in Seoul. | |
"Now that those concerns are easing gradually, the market is staging a relief rally, which is quite natural." | |
Broad rally | Broad rally |
The Nikkei 225 index was up 3.7%, or 466.94, to 13,123.36. Hong Kong's Hang Seng Index soared 4.4% to 24,154.75. | The Nikkei 225 index was up 3.7%, or 466.94, to 13,123.36. Hong Kong's Hang Seng Index soared 4.4% to 24,154.75. |
The Shanghai Composite Index climbed more than 3% and stock indexes in Australia, the Philippines, Singapore, South Korea and Taiwan all gained more than 2%. | The Shanghai Composite Index climbed more than 3% and stock indexes in Australia, the Philippines, Singapore, South Korea and Taiwan all gained more than 2%. |
The Frankfurt Dax was up 18 points, or 0.27%, at 6738.33, while the Paris Cac was ahead 9.94 points, or 0.20%, at 4875.94. The London FTSE was virtually unchanged at 5852.70. | |
US investment bank Lehman Brothers had announced on Monday that it was raising extra cash to help counter rumours it was in financial difficulty. | US investment bank Lehman Brothers had announced on Monday that it was raising extra cash to help counter rumours it was in financial difficulty. |
On Tuesday it said it had raised $4bn (£2bn) by issuing preferred shares on the New York Stock Market, $1bn more than planned, because there had been "substantial interest". | On Tuesday it said it had raised $4bn (£2bn) by issuing preferred shares on the New York Stock Market, $1bn more than planned, because there had been "substantial interest". |
And Tuesday's news of a massive $19bn write-down by Swiss bank UBS failed to dent confidence, with investors welcoming greater clarity of the bank's position. | |
On Tuesday, the Dow Jones in New York closed up 3.2% or 391.5 points at 12,654.4. | On Tuesday, the Dow Jones in New York closed up 3.2% or 391.5 points at 12,654.4. |