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REFILE Banks commodities lift Europe stocks 75 pct
Oct 31,2008 00:00
by
saroja
FTSEurofirst 300 closes 7.51 percent higher * Investors brace for possible U.S. rate cut * VW biggest faller in Europe, Porsche among top gainers * Banks and oil sectors lend biggest sector support (updates with closing prices) FRANKFURT, Oct 29 (Reuters) - European shares closed more than 7 percent higher on Wednesday, led by banks and commodity stocks ahead of a U.S. interest rate decision widely expected to yield a cut. At its close, the pan-European FTSEurofirst 300 index was up 7.51 percent higher at 897.06, closing at its intraday high. "There are a lot of things to be positive about on the market at the moment, with just a bit of nervousness ahead of the U.S. interest decision mixed in," said Hank Potts, equity analyst at Barclays Wealth. "Valuations look cheap, simply too much bad news has been coming down the pipeline lately and the markets appear to have priced in a collapse, which looks too excessive despite the hurdles that many companies face," Potts added. The index has shed around 41 percent so far this year, amid turmoil across the financial markets that has seen banks broken up or nationalised and left investors fretting about the onset of global recession. Wall Street headed slightly higher on Wednesday as investors overlooked an early opportunity to lock in profits on Tuesday's strong gains and instead focused on hopes that the U.S. Fed will slash rates. The Federal Reserve is set to announce its rate verdict at 1815 GMT. In a Reuter's survey, primary dealers expected the Fed funds rate will be cut to 1 percent from 1.5 percent. Japan may also cut borrowing costs this week, a source with knowledge of the matter said. Tokyo's Nikkei average .N225 soared 7.7 percent. European banks were the outstanding gainers, with HBOS leading the sector, up 28.2 percent, follower by Santander (SAN.MC: Quote, Profile, Research, Stock Buzz) up 14 percent, UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) up 15.8 percent, and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) adding 30 percent. http://www.reuters.com/article/marketsNews/idUSLT50471620081029 |