European stocks and the euro turned positive yesterday, staunching sharp losses seen a day earlier on equity markets as investors did a bit of bargain shopping.
In London, the FTSE 100 index of leading shares ended the day with a gain of 0.44 per cent at 5,791.41 points. The Frankfurt DAX was 0.57 per cent higher at 6,671.11 points, and the CAC 40 added 0.89 per cent to 3,392.33 points.
On Tuesday, the DAX lost 3.40 per cent, CAC 40 tumbled 3.58 per cent and the FTSE 100 slid 1.86 per cent amid concern over conditions of a Greek debt write-down and prospects for global growth.
In foreign exchange trading, the European single currency climbed to $1.3150 from $1.3113 late in New York on Tuesday.
US stocks also rebounded in early New York trading, with investors encouraged by US jobs data but still cautious ahead of the deadline for Greece to seal its debt write-off deal.
The Dow Jones Industrial Average was up 0.59 per cent to 12,834.57 points, while the broad-based S&P 500 added 0. per cent to 1,352.18 and the tech-rich Nasdaq Composite rose 0.82 per cent to 2,934.24 points.
Analysts credited a rising sense of confidence that Greece would get the necessary level of private investors to sign on to its €107 billion debt write-off and swap plan by a late Thursday deadline.
There were also bargains to be had following drops on Tuesday that in several cases had exceeded 3.0 per cent. “We see some investors coming in to sift through the rubble left from yesterday’s perfect storm,” said Mike McCudden, head of derivatives at online brokerage Interactive Investor.
“Slowing growth in emerging and established markets and continued fears over Greece continue to have equities balancing on a knife edge.”
Global share prices slid on Tuesday after China’s announcement that it was expecting growth to slow further this year due to a fall in exports caused by slackening demand in the key US and European markets.
Markets also took a hit after Brazil said its economy grew by a slower-than-expected 2.7 per cent last year compared with 2010, and from signs that the eurozone has fallen into a mild recession.