4 Dec 2008

European stocks stage late rally

7:48 am on 4 December 2008

European stocks staged a late rally on Wednesday - a day before expected cuts in interest rates by the Bank of England and the European Central Bank.

The FTSEurofirst 300 index of top European shares closed 0.6% higher at 829.89 points.

Banks ended down, with Credit Suisse falling 8.9% on concerns it could face another quarterly loss.

UBS, which was badly hit by the credit crisis earlier on, was bailed out by the Swiss government.

Around Europe: Germany's DAX index gained 0.8% and France's CAC 40 added 0.4%.

In Britain, the FTSE 100 index closed up 47.10 points, 1.1%, at 4,169.96, having closed 57.37 points in thin, volatile trading.

Euro zone retail sales fell much more than expected in October, adding to arguments for a deep interest rate cut by the ECB on Thursday. It is currently 3.25%.

The Bank of England is also due to announce a rate decision on Thursday.

The rate is currently 3% - its lowest since 1955.

Other markets

In Japan, the Nikkei average advanced 1.8%, regaining some ground after a drop of more than 6% on Tuesday.

Shares in Hong Kong and Shanghai gained 2 to 3%, while Singapore rose 1.4%.

The Australian stock market closed marginally higher. At the 1615 AEDT close, the S&P/ASX200 index had risen 5.6 points, or 0.16%, to 3,533.8, while the All Ordinaries added 3.1 points, or 0.09%, to 3,476.5.

In New Zealand, the NZX50 was up 55 points, or 2.1%, to close at 2707 on turnover of $83 million.

Telecom rose 6 cents to $2.40, Contact Energy was up 5c to $6.55 and Fletcher Building gained 12c to $5.50.