Stock markets bounce after sell-off


Stock markets have risen, a day after billions were wiped off the value of shares amid global market turmoil.

London’s FTSE 100 index, which measures the share prices of the 100 most valuable companies traded on the London Stock Exchange, was up nearly 1.5%.

Other European markets were also higher, and shares in the US were up shortly after trading began.

However, investors remain worried over the continuing slide in oil prices and slowing growth in China.

In the US, the Dow Jones was up 123.96 points, or 0.8%, at 15,7890.70 in early trade.

In the UK, the FTSE 100 rose 83.10 points to 5,756.68, and the share indexes inFrance and Germany were both up by more than 1.5%.

Much earlier, Japan’s main share index closed down by more than 2%.

On Wednesday, global stock markets suffered hefty losses and London’s FTSE 100 ended the day down 3.5%.

By doing so it entered a “bear market”, having fallen 20% from its record high in April last year.

Market performance graph

Oil market

Oil prices remained weak on Thursday, having hit their lowest levels since 2003 in the previous session.

A brief rally in crude prices quickly ran out of steam, and after climbing back above the $28-a-barrel mark, Brent crude fell back to $27.75.

US crude was 1% lower on the day, trading at $28.09 a barrel, having fallen below $27 on Wednesday.

Crude oil prices have been falling since mid 2014, but oil-producing countries have maintained output despite the decline, contributing to the excess supplies on the market.

Earlier in the week, the International Energy Agency warned that oil markets could “drown in oversupply” in 2016.

‘Good shape’

Patrick Thomson from JP Morgan Asset Management told the BBC that investors should not panic.

“If you look at the US economy particularly, that is actually in pretty good shape,” he said.

“You look at all of the data coming out recently, clearly growth is a little muted and corporate earnings are somewhat lower than expected due to energy prices and the strong dollar, but underlying fundamentals, particularly the US consumer, is in very good shape.”

That message was echoed by analysts Capital Economics, which said: “Despite the prevailing gloom about the world economy, we think global growth will pick up from around 2.5% last year to 3% in both 2016 and 2017, using our own estimates for China.”

 

Article Provided by BBC News.