Thursday July 9, 11:36 AM
European stocks rebound
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LONDON (AFP) - Europe's main stock markets rallied Thursday on bargain hunting after recent volatile trade, but London investors were cautious ahead of an interest rate decision from the Bank of England, traders said.
Meanwhile, leaders of the world's industrialised powers continued the Group of Eight (G8) summit in Italy, where they are assessing their efforts to lift the struggling global economy out of the doldrums.
In late morning trade, London's FTSE 100 index of leading shares was up 0.83 percent at 4,174.72 points.
Frankfurt's DAX 30 (Xetra: news) gained 1.45 percent to 4,639.62 points and the Paris CAC 40 increased 1.03 percent to 3,040.87 nearing the half-way stage.
The DJ Euro Stoxx 50 index of leading eurozone shares jumped 1.30 percent to 2,321.27 points.
On the foreign exchange market, the European single currency climbed to 1.3958 dollars.
Wall Street had finished narrowly mixed Wednesday with investors cautious about the economic outlook at the kick-off of the corporate earnings season.
But Japanese shares fell Thursday for a seventh straight session, closing at the lowest level in almost seven weeks as worries grew about the economic outlook and the strength of the yen.
"A choppy session on Wall Street yesterday left the major indices closing in a mixed mood although some positive sentiment is prevailing after that bullish statement of growth by the IMF," said CMC Markets dealer Matt Buckland.
The International Monetary Fund on Wednesday raised its outlook for the global economy in 2010, boosted its growth forecast to 2.5 percent, an improvement of 0.6 points from the prior April forecast.
Buckland added: "However, it's not all good news -- Alcoa (NYSE: AA - news) kicked off the second-quarter earnings season last night by reporting a loss and although this is only one of a host of companies who will be publishing numbers in the coming days, traders hoping that this round would bring some cheer to the market are likely to be disappointed by the poor start."
US aluminium giant Alcoa said Tuesday it had posted its second consecutive quarterly loss as aluminium prices plunged amid a sharp global economic downturn.
The higher than expected 497-million-dollar net loss in the first quarter reflected a decline of 61 cents per share, compared with a net loss for the 2008 fourth quarter of 1.2 billion dollars, or 1.49 dollars per share.
In London on Thursday, British investors were on tenterhooks before the conclusion of the Bank of England's monthly monetary policy meeting amid a deep recession.
The BoE's monetary policy committee (MPC (A050540.KQ - news) ) was forecast to pump more money into markets to stimulate lending -- but will likely keep interest rates at a record-low 0.50 percent, analysts said. An announcement is due at 1100 GMT.
Most economists expect the central bank will agree to pump out another 25 billion pounds (28.9 billion euros, 40.4 billion dollars) for lenders as part of its quantitative easing (QE) scheme, which is designed to encourage lending.
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