The bad news continues in Europe’s markets. Indexes made early gains but that wasn’t to last. The Fed may have launched a rescue plan for AIG, but investors remain unconvinced it will be enough to reverse the downward financial trend.
One London analyst said: “I think we need to be cognizant to the fact that the markets are going to remain extremely volatile. We’re not out of the woods by any stretch of the imagination. I think the bear (market) squeeze rally will take place once all the bears have been shaken up, particularly in the banking stocks where they have been heavy sellers with. You might find other people start to sell into it.”
As traders try and make sense of the drama of recent days, the air of uncertainty pushed London’s FTSE down 2.25 points by the close. The German DAX fell by more than 1.6 percent, while in France the CAC40 lost over two percentage points. Oil meanwhile fell below the 90 dollar-a-barrel mark.