GLOBAL stock markets rallied yesterday as investors hunted for bargains after days of losses amid hopes of an end to the ongoing financial crisis, analysts said.
Shares were also helped by the likelihood that the US Federal Reserve will cut interest rates in a bid to ease pressure on the slowing economy today.
Asian equities mainly bounced back, helped by a big rebound in Hong Kong where stocks rocketed 14.4 per cent to rebound strongly after plunging sharply the previous day.
Frankfurt jumped 9.26 per cent near the half-way stage yesterday, with carmaker Volkswagen boosted as Porsche prepares to take over the company.
London soared 4.25 per cent and Paris won 2.99 per cent in volatile trading despite continued worries about the ailing global economy.
"Rallies like this are to be expected in bear markets, but there need to be a number of other indications that show a bottom in equity prices have been hit," said Capital Spreads managing director Simon Denham in London.
"Whilst it is incredibly difficult to predict what happens in the future, the general rule of thumb is that equity prices hit a bottom about two to three quarters before the economy comes out of a recession.
"With many predicting this recession to be a long and hard one, it's a brave investor who piles into equities now, believing that we'll be back in positive growth territory at the end of 2009."
It emerged last week that Britain's economy shrank in the third quarter of 2008 for the first time in 16 years, stoking fears of a global recession which is defined as two successive quarters of negative economic growth.
Elsewhere yesterday, Tokyo finished with a gain of 6.4 per cent as the yen fell sharply and investors picked up bargains after the Nikkei index had hit a 26-year low. Seoul rose 5.6 per cent and Shanghai firmed 2.8 per cent.
"The equity market was massively oversold and a rally was due," said RBS Securities analyst John Richards.
But some Asian markets missed the rebound, with Sydney ending down 0.4 per cent.In the foreign exchange arena, the euro rallied from two-year lows against the US dollar as rebounding stock markets turned investors away from the US currency.AFP
Shares were also helped by the likelihood that the US Federal Reserve will cut interest rates in a bid to ease pressure on the slowing economy today.
Asian equities mainly bounced back, helped by a big rebound in Hong Kong where stocks rocketed 14.4 per cent to rebound strongly after plunging sharply the previous day.
Frankfurt jumped 9.26 per cent near the half-way stage yesterday, with carmaker Volkswagen boosted as Porsche prepares to take over the company.
London soared 4.25 per cent and Paris won 2.99 per cent in volatile trading despite continued worries about the ailing global economy.
"Rallies like this are to be expected in bear markets, but there need to be a number of other indications that show a bottom in equity prices have been hit," said Capital Spreads managing director Simon Denham in London.
"Whilst it is incredibly difficult to predict what happens in the future, the general rule of thumb is that equity prices hit a bottom about two to three quarters before the economy comes out of a recession.
"With many predicting this recession to be a long and hard one, it's a brave investor who piles into equities now, believing that we'll be back in positive growth territory at the end of 2009."
It emerged last week that Britain's economy shrank in the third quarter of 2008 for the first time in 16 years, stoking fears of a global recession which is defined as two successive quarters of negative economic growth.
Elsewhere yesterday, Tokyo finished with a gain of 6.4 per cent as the yen fell sharply and investors picked up bargains after the Nikkei index had hit a 26-year low. Seoul rose 5.6 per cent and Shanghai firmed 2.8 per cent.
"The equity market was massively oversold and a rally was due," said RBS Securities analyst John Richards.
But some Asian markets missed the rebound, with Sydney ending down 0.4 per cent.In the foreign exchange arena, the euro rallied from two-year lows against the US dollar as rebounding stock markets turned investors away from the US currency.AFP
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