Credit concern continues to hinder markets

On Monday, European equity markets made a negative start to trading but inched higher towards the end of morning trade.

US stocks rebounded from the worst two-day slide since 2003 as Wall Street's biggest securities firms said the sell-off made shares of banks, homebuilders and retailers cheap.

On Tuesday, European stocks rebounded from a five-day plunge, and shares in Asia advanced for a second day on waning concern that the US subprime credit crisis will dampen global economic growth.

On Wednesday, European markets fell sharply, surrendering all of Tuesday's gains, as investors were unsettled by a late sell-off on Wall Street prompted by renewed concerns about turmoil in credit markets. Asia's stock markets fell more than four per cent, and the yen hit a three-month high as investors scrambled away from risky trades on worries about a worsening credit crunch.

On Thursday, European equity markets rallied after a last-minute bounce for US stocks overnight, while strong results from the bank sector also provided a lift.

By late morning on Friday, European equity markets surrendered early gains and moved lower, weighed down by weakness in the oil and mobile telecoms sectors and ongoing nervousness over conditions in credit markets.

This article was compiled by Valletta Fund Management Limited, a member of the BOV Group. Valletta Fund Management, The Mall Offices, Level 6, The Mall, Floriana VLT 16. Freephone: 8007-2344. E-mail: infovfm@vfm.com.mt Website: www.vfm.com.mt VFM is licensed by the MFSA.