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

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Christmas Gains Popularity in Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal 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.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.