Europe’s stock markets had another extremely volatile day on Tuesday, see-sawing between gains and losses, but the region’s biggest bourses did end the trading session in the black and shares were broadly higher at the close.
The pan-European FTSEurofirst 300 index of top shares provisionally closed 1.3 percent higher in strong volume, after sinking by as much as five percent and hitting a two-year low earlier in the session.
There were signs that investors were looking for bargains after the big sell off that has caused a 20 percent dive in share values over the last two and a half weeks.
Badly beaten down stocks such as miners, carmakers, banks, technology stocks and oil and gas companies rallied as buyers came out to take advantage of what they hoped was the bottom of the market.
Even so investors remain very concerned that major economies could fall back into recession and have lost confidence in the politicians and financial policymakers ability to stop the rot.
Market watcher Louise Cooper with BGC Partners in London said: “I would characterise the markets as being hugely volatile, the bulls and the bears are in a battle, not quite to the death, but they are in quite a substantial battle.”
And it is still not at all clear who is going to win that battle.
The double crisis of a worsening euro-zone debt problem and a faltering US economy have increased the risks of a double-dip recession.
After 10 straight days of losses on the world’s markets, the bears – the pessimists – are out in force and with confidence in the global economy’s prospects evaporating fears are high that the financial markets will remain in a slump, feeding a vicious circle of pessimism.