Share prices take tentative steps towards recovery

Share prices worldwide have made the first steps towards reversing last week’s seemingly unstoppable downward trend, which at one point saw American investors holding share losses running at nearly $1.2 trillion.

An uneventful weekend in terms of world news has stirred indexes throughout Europe into positive, if cautious, action, as Wall Street reported a positive start to the week. The Dow Jones and Nasdaq gained immediately upon opening, rising more than 3% within the first ten minutes of trading. In London, the FTSE showed similar early-day gains, while Paris and Frankfurt reported upward trends of between 3 to 4% - although trading still remains tentative as to America’s next move, following President Bush’s commitment to military retaliation.

However, while gains have been made, the markets have a long and steady climb ahead before they attain the levels seen before the 11 September attacks.

Markets in the Far East remained static, with Tokyo closed for a bank holiday and Hong Kong’s Hang Seng rising only slightly, thanks to active buying of banking and telecoms stocks.

In addition, European indexes, slightly more buffered from the slide than their American counterparts, are still carrying losses of around 20% as fears of worldwide recession grow despite interest rate cuts by both the US Federal Reserve and Central Banks throughout Europe.

In the UK, the Governor of the Bank of England, Edward George has said that it is too soon to judge whether the UK will enter into recession but hinted at further cuts in interest rates in an attempt to stimulate domestic economy. He also described how the UK could see some short-term weakening in both the current quarter and the next, in terms of the economic shockwaves of the terrorist attacks in America.

He added: “Looking beyond the short-term, there is no reason to think that the world is going into a really serious decline.” (CL)