Recovery on European, Asian markets
World markets showed signs of recovery Wednesday, as European stocks followed Asian ones upwards. On Tuesday Wall Street started the apparent bounce-back following a Federal Reserve promise to keep interest rates near zero for at least two years.
After several days of panic, the Fed failed to come up with a new stimulus programme to succeed the one that ended in June but the interest rate pledge meant that the Dow finished up 3.98 per cent, while the S&P climbed 4.74 per cent.
Wednesday’s Asian gains prompted Indian Finance Minister Pranab Mukherjee to predict stability in a matter of days.
"One thing is certain, confidence has come back in respect of Indian markets," he said, a day after Indian shares hit their lowest level since June 2010 on worries about international debt. "In a couple of days it [the market] will be stable."
South Korea’s ban on short-selling of a listed stocks for three months helped cool the selling frenzy.
Oil prices, which have plunged 12-15 dollars a barrel over the last 10 days, soared after the Fed pledge but oil analysts remained perturbed.
The International Energy Agency reduced its estimate for global oil demand this year by 100,000 barrels per day because of a downward revision to demand in the second quarter, high prices and "slowing economic growth".
Stock markets in the Gulf and Russia also recovered Wednesday.
Emergency action on eurozone debt accelerated on Wednesday with a drop in Italian rates, and new budget moves in Rome and Paris after European Central Bank president Jean-Claude Trichet called for a "quantum leap" in tightening up governance of public finances.
The United States and Europe are no longer the world’s economic growth engines, Indonesian Vice-President Boediono told the opening session of the 43rd Asean Economic Ministers Meeting in Manado, Sulawesi, Wednesday.
South-east Asian nations should adjust rapidly to China and India setting the pace of the global economy, he said.
The south-east Asian ministers are expected to discuss progress toward the creation of an integrated economic community of almost 600 million people by 2015 during their talks in Indonesia this week.