 Activity was high on all markets |
The world's stock markets have staged a dramatic recovery after investors took advantage of recent share slumps and rumours of a resolution to the Iraq crisis. All European indexes closed more than 6% higher while in the US, the Dow Jones index of major companies gained almost 270 points, or 3.6% - its biggest one-day win in five months.
Leading shares in London surged by 6%, or almost 200 points, their best one day gain in more than 15 years.
Paris shares also ended the day over 6% higher while in Germany, the leading index closed up 7%.
But in Japan the Nikkei share index closed marginally lower, down 0.9% at 7,868.56 points, just above the 20-year lows recorded in recent days.
 Arguably this is your last chance to buy stocks at these levels  |
Investors were unsure whether the more positive mood in Europe could be sustained as uncertainty continued about a possible war in Iraq.
The gains were a stark contrast to Wednesday when London's FTSE 100 index lost 5% of its value and the French Cac 40 and the German Dax both fell 3%.
The Frankfurt stock market has been the worst performer in the current bear market and is in its longest downtrend since the 1930s.
Easing the rules
Bullish analysts are hoping that investors will see shares as undervalued.
"Equities... relative to bonds are cheaper than they have ever been in the post-war period and certainly cheaper than in the 1970s bear market," said Nigel Cobby of JP Morgan.
"Arguably this is your last chance to buy stocks at these levels - but people only ever see the catalyst with hindsight."
One move designed to stop the spiral in UK shares is a change in the solvency rules governing life assurers.
The rules have been blamed for making market falls worse because insurers are forced to sell shares to ensure they have enough money to meet their liabilities.
Now the Financial Services Authority has invited insurers to apply for individual waivers from solvency rules.
Shares in the life assurers were some of the hardest hit on Wednesday.
Depressing news
The nervous mood provoked by the Iraqi crisis is not the only factor weighing on the market.
Europe has also seen a string of more directly gloomy news, especially the worsening plight of the German economy, Europe's largest.
A number of the continent's most important companies, notably German drugs group Bayer and French utility Suez in recent days, have unveiled depressing news, and three big firms have announced 2002 losses of more than 20bn euros.
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