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City cautious but hopeful as banks start to regroup
Simon English9 Oct 2008
City traders saw slender signs of optimism today as London shares staged a rally in early trading.
The FTSE moved up 67.62 points, or 1.5 per cent, to 4434.31 as dealing floors opened for business, with bank shares leading the way forward.
Although the mood remains fractious at best, the hope was that interest rate cuts across the world and the UK government's historic banking bail-out would stabilise markets.
The story was the same across Europe, with the French, German and Italian stock markets all heading higher.
Bank shares led the FTSE gain. HBOS was up almost 20 per cent, while Royal Bank of Scotland also showed signs of life, up 17 per cent.
Trading volumes were still slight, reflecting investors' reluctance to commit much money to the market.
Rik Zwaneveld at AFS Brokers said: "Markets are not turning positive, they are recovering from heavy losses. The sentiment has not really improved."
Henk Potts at Barclays Wealth added: "The measures we have seen taken should provide a level of confidence. It shows the authorities are prepared to use every weapon to avoid a long-term recession."
Reader views (1)
We have a global banking crisis and everyone agrees that interest rates around the world still need to be cut massively and the banks need to be recapitalised. Whilst everyone is talking about the bailout the question remains who is going to and who can afford to buy up all UK, US and EU Govt debt?
- Rupert, London, 09/10/2008 12:36
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