Business, Economics and Jobs

Bargain hunters lift stock markets in Europe and Asia after heavy falls


An investor watches market indices monitors at the Australian Stock Exchange (ASX) during morning trade in Sydney on August 11, 2011.


Torsten Blackwood

European share markets rebounded Thursday morning after being savaged the day before on rumors of a French credit rating downgrade, while in Asia sellers just outnumbered buyers in volatile trade.

London's FTSE 100 index climbed 1.85 percent, Germany's Dax index was 2.2 percent higher and the Cac 40 in France posted gains of 2.1 percent led by banking stocks including Societe Generale, which firmed 6 percent.

Analysts said bargain hunters were cashing in on a wave of selling Wednesday, inspired by unfounded reports that France was about to lose its AAA credit rating and Societe Generale was in need of a government rescue, the BBC reported.

The French Treasury hosed down the rumors and Societe Generale Chief Executive Frederic Oudea dismissed them as "absolutely rubbish."

"People are scared," he told France Info Radio, according to the BBC.

"So the tiniest information touches off irrational fears. To our clients, we have to tell them that these rumors are baseless and that they can have confidence in Societe Generale."

CMC Markets head of equities Jimmy Yates told Reuters: "Investors are hugely worried about the spread of the debt contagion and the economic status of the U.S."

He said each sell-off on the markets is "effectively a cry for help to politicians and central banks to reach a solution to the debt crisis."

Asian stock markets were generally weaker but finished off their lows as traders sought value despite a 4.6-percent fall on New York's Dow Jones Industrial Average on Wednesday.

Tokyo's Nikkei 225 index headed rapidly south in the morning but held its nerve to close just 0.63 percent lower, the BBC reported. Hong Kong lost one percent and Sydney was flat.