LONDON (AFP) — World stocks rebounded Tuesday with exchanges moving back well into the black as analysts said a recent global sell-off was overdone, despite lingering concerns about the US economy.
In Europe the London FTSE 100 index gained 1.73 percent at 6,226.50 at the close, while in Paris the CAC 40 added 1.36 percent to end the day at 5,506.68 while in Frankfurt the Dax took on 1.58 percent to close at 7,630.31.
The Euro Stoxx 50 index of key eurozone shares gained 1.20 percent to end at 4,277.24.
The euro was changing hands at 1.4786 dollars, after earlier hitting a historic peak of 1.4814 dollars.
Across the Atlantic US stocks led the way by swinging higher in early trade, rebounding from a heavy selloff in the prior session, as bargain hunters were encouraged by an upbeat earnings report from tech giant Hewlett-Packard.
The Dow Jones Industrial Average rose 0.25 percent to 112,990.47 a day after sliding below 13,000 amid worries about the US economic outlook.
The Nasdaq composite rose 0.59 percent to 2,608.77 and the Standard & Poor's 500 broad-market index climbed 0.48 percent to 1,440.15 in midsession.
"In general, the market is rebounding from yesterday's losses," said a local trader in Frankfurt. "This has led to a series of smaller rebounds and corrections."
Bob Dickey at RBC Dain Rauscher in the United States said that after the heavy selloffs of the past couple of weeks, it appears that "a bottom is approaching" providing a buying opportunity for investors.
"There is usually some negative news to go along with the bottom, but this is the opportunity that many cash-holders are waiting for," he said.
In London embattled British lender Northern Rock bucked the upward trend losing 6.91 percent of its value to 97 pence after losing one fifth, or 21.42 percent a day earlier.
Also in the doldrums was Swedish mobile networks maker Ericsson which lost 11.12 percent of its value in Stockholm to 15.98 kronor after a downbeat prospects report from chief executive Carl-Henric Svanberg at a news conference in New York.
Stocks markets were mixed in Asia, with Tokyo and Hong Kong bouncing back strongly in late trade as speculation grew that the US Federal Reserve would cut rates again at its meeting next month, dealers said.
Bargain-hunters helped lead the gains in Tokyo, Asia's largest bourse, where the benchmark Nikkei index slipped to a 16-month intra-day low in early trade before finishing a robust 1.12 percent higher.
Hong Kong ended the day 1.13 percent higher after an early slide, while Singapore was up 0.78 percent and Shanghai rose 0.45 percent.
"Japanese shares rebounded, lifting some Asian shares. But once the market cools its head shares could float back down again and open lower Wednesday morning," said Fumiaki Nakanishi of SMBC Friend Securities.
He said that a rumour of unknown origin spread through the market in late trade that the Fed will cut rates, "sparking a buying bout."
Sentiment in Asia was also lifted by an online Financial Times report that the Fed was expected to give a brighter forecast for the US economy, even though the report, if true, would likely decrease chances of a rate cut.
"The dramatic turnaround toward the close reflects expectations that the market might have hit a near-term bottom, for now at least," said Michael Hsu, an assistant vice president at Taiwan Life Asset Management in Taipei, which ended flat.
All Asian shares had opened lower Tuesday morning after a raft of bad news from the US banking sector, which has been hit hard by rising defaults in "subprime" loans offered to high-risk customers during the US housing boom.
"The biggest focus is whether US shares will stabilise or not," said Masayoshi Yano of Tokai Tokyo Securities.
Elsewhere in Europe there were rises of 0.87 percent to 37,938 in Milan, 1.03 percent to 15,700 in Madrid, 0.56 percent to 493.84 in Amsterdam, 0.82 percent to 8,338.95 on the Swiss Market Index and 0.45 percent to 4,009.87 in Brussels.
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