European shares rebound strongly (Lead)October 13th, 2008 - 6:29 pm ICT by IANS
Frankfurt, Oct 13 (DPA) European stocks rebounded strongly Monday from last week’s dramatic sell off after a recovery in shares across the Asian-Pacific region and stepped up political action helped to shore up investor confidence.After European equities plunged last week by about 20 percent last week as the biggest financial crisis since the 1930’s triggered panic selling, Europe’s blue-chip Stoxx 50 climbed by 6.5 percent to 2230 in late morning trading Monday.
Buoyed by the far-reaching bank rescue plan unveiled by European leaders Sunday, investors across Europe piled back into stocks with national bourses gaining ground also after a weekend Group of Seven (G7) meeting pledged action to fight the global crisis.
While Europe’s premiere stock market in London climbed by about 5.0 percent and by more than 6.0 percent in Paris, Milan and Madrid. Frankfurt had risen 5.7 percent.
Helping to lead the rebound in European shares were banking stocks which chalked up gains of about 20 percent in early Monday trading.
By mid morning both shares in the Swiss banking giant UBS and Germany’s biggest bank Deutsche Bank had jumped by more than 12 percent.
The signs that European bourses were regaining a sense of composure as they headed into another trading week came in the wake of solid performance by share markets across the Asian-Pacific region.
After running by losses last week, Hong Kong soared Monday to close more than 10 percent higher, while shares in India and Singapore finished the day up about 7 percent. Tokyo was closed.
Shares in Sydney, which have taken beating as a result of the Australian economy’s heavily reliance on commodities, gained 5.5 percent.
Indeed, the glimmer of hope which emerged among investors Monday that the political moves put in place in recent days would help to underpin economic confidence resulted in oil prices retracing last week’s losses to rise by more than 4.0 percent to $80.91.
Monday’s cautious economic mood in Europe also helped to give the euro a new firmer of direction with the common currency pulling back from the losses it incurred last week amid fears about the outlook for the European economy.
At one point, the euro was up about 2.0 percent to nearly $1.37 Monday, before retreating again to under $1.36 as the trading day unfolded.
Gold, a traditional safe during times of economic turmoil, also lost ground Monday, slipping by 3.6 percent to $859.75.