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Stocks grow cautious after rally | |
(about 3 hours later) | |
European shares trimmed gains after earlier rallying on hopes 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 gained 0.37%. | |
Hong Kong's Hang Seng index closed up 3.2% and Japan's Nikkei 225 index hit a one-month high after strong overnight gains on Wall Street. | |
Meanwhile, London's FTSE 100 index was virtually unchanged at 5,848 points. | |
Analysts turned cautious on the prospect of another rally on Wall Street, with investors awaiting closely-watched US jobs data on Friday for an indication on to what extent the credit crisis has hurt the real economy. | |
"Lehman's rights issue for $4bn was oversubscribed, and there was surprising interest in some retail stocks ... To expect too much of a follow-through today could be folly," said David Buik of Cantor Index . | |
'Concerns easing gradually' | 'Concerns easing gradually' |
Earlier this week, US investment bank Lehman Brothers and Switzerland's UBS have both announced new share issues to repair their balance sheets, with both actions being well received by markets. | |
UBS also announced a loss of $39bn on sub-prime writedowns, and its chief executive resigned. | |
"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. | "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." | "Now that those concerns are easing gradually, the market is staging a relief rally, which is quite natural." |
Broad rally | Broad rally |
The rally which began on Wall Street continued in Asia overnight. | |
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. |
In Tokyo, the Nikkei 225 index ended up 4.2% at 13,189.36. Hong Kong's Hang Seng Index climbed 3.2% to 23,872.43. | |
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%. |