News / Economy

European Markets Bounce Back After Volatile Trading

Traders at the Saxo Banque study their screens in their offices in Paris, August 10, 2011
Traders at the Saxo Banque study their screens in their offices in Paris, August 10, 2011

European stock markets fell in early trading Thursday, largely on concerns about the fiscal health of the continent’s banks. But the markets bounced back in the afternoon, after French and German leaders scheduled an emergency summit to address the euro zone’s debt crisis.

It looked like another day of heavy losses on European markets, following drops in key Asian stock indexes.

But the trend was reversed in the early afternoon.

Analysts said investors took some comfort from news that French President Nicolas Sarkozy and German Chancellor Angela Merkel are to meet next Tuesday to discuss the continent’s debt situation.

Even with those late-day gains, during the last two weeks the London stock index is down more than 15 percent, and the German and French indexes are down more than 20 percent.

Many concerns

Investors have become increasingly concerned that troubled economies in the euro zone may face further problems meeting their debt payments, and that more countries and commercial banks may be affected by the crisis.

But the move by the two key European leaders to increase their personal involvement in trying to ease the situation provided enough confidence to turn stock prices around.

At the London School of Economics, Professor Iain Begg says decisive action by national leaders is exactly what is needed to address the debt crisis and the resulting impact on stock markets, bank confidence and economic growth.

“If we set too much store by one day’s movement, or even a few hours movement in the markets, we’d end up spending so much time gazing at our own navels that we wouldn’t be able to work out what’s really going on," said Begg. "And I think that what the politicians have been given is a warning sign. And now it’s up to the politicians to act much more decisively and cohesively. If they do that, then this froth in the market will probably go away.”

Lack of confidence

During a debate in the British Parliament Thursday, Finance Minister George Osborne blamed the stock market drops on what he called a lack of confidence in ability of governments to repay their debts. He called for international action to address the situation.

“This is a global as well as a European crisis, and at this autumn’s meeting of the IMF and the G-20 we need far greater progress on global imbalances," Osborne said. "We need an international framework that allows creditor countries like China to increase demand, and debtor countries to make the difficult adjustments necessary to repay them.”

Europe’s Central Bank has already issued guarantees designed to shore up confidence in troubled economies like Italy, Portugal and Greece. But some experts say the continent’s markets will not truly stabilize until there is agreement on issuing European bonds, through which individual countries would be able to borrow money with the full backing of all the euro zone countries

You May Like

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs

World Currencies

EUR
USD
0.8957
JPY
USD
120.93
GBP
USD
0.6393
CAD
USD
1.2199
INR
USD
63.470

Rates may not be current.