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Stock markets soar after last week's rout

(China Daily)
Updated: 2008-10-14 06:58

Global stock markets rebounded strongly Monday after last week's historic sell-off as governments from Europe to Australia to the US intensified efforts to ease a financial crisis that threatened to throw the world into recession.

The benchmark Shanghai Composite Index gained 3.7 percent, or 73 points, to 2073.57. It had dropped 3.4 percent by midday in volatile trading but a buying spree by State-owned financial institutions pushed the index up.

A broker is seen at the stock market in Frankfurt, central Germany, Monday, Oct. 13, 2008. [Agencies]

Hong Kong's Hang Seng Index, which tumbled more than 7 percent on Friday, soared 1515 points, or 10.2 percent, to finish at 16312.

Australian and Singapore indices jumped more than 5 percent, while South Korea added around 3.8 percent. India's Sensex rose 7.64 percent.

In Japan, where the Nikkei 225 tanked nearly 10 percent on Friday to close out its worst week in history, trading was closed for a public holiday.

As markets opened in Europe, Britain's FTSE-100 shot up 8.3 percent, Germany's DAX climbed 11.4 percent and France's CAC-40 advanced 11.2 percent.

Wall Street stormed back after its worst week ever and staged the biggest single-day stock rally since the Great Depression on Monday, catapulting the Dow Jones industrials to a 936-point gain and finally offering relief from eight consecutive days of stock market carnage.

A rebound had been expected at some point after the Dow lost nearly 2400 points over eight sessions. But the gains don't necessarily signal that the market is now finished with the intense volatility of recent weeks.

Dave Rovelli, managing director of US equity trading at Canaccord Adams in New York, said that while the market had been expecting a snapback rally after steep declines logged since last month, sustainable gains could prove more elusive.

"Everybody knew that we were going to have an up day eventually," he said. "When everybody expects something it never really comes true."

He said that while he expects a rally, it doesn't necessarily signal an end of the market's troubles.

Financials helped lead Monday's advance in Asia, with leading Chinese lender Industrial & Commercial Bank of China, or ICBC, soaring 13.6 percent in the Hong Kong stock exchange.

Leading Australian banks such as Commonwealth Bank of Australia and ANZ Banking Group Ltd were also up sharply. Commodity issues gained as well.

Oil prices recovered, with light, sweet crude for November delivery up $3.33 at $81.03. The contract fell $8.89 on Friday to $77.70, the lowest since Sept 10, 2007.

Agencies