After Monday’s massive nosedive in share prices they started buying again on Wall Street on Tuesday as the exchanges opened, but then the indexes were up and down and it was a pretty bumpy road.
Analysts spoke of hope of hearing something later today from the US central bank, the Federal Reserve, about how it plans to combat a market meltdown. If there is nothing substantial from the Fed, the prediction is the sell off will resume.
Around the world investors remain nervous as Robert Halver of Baader Bank in Frankfurt said: “We still live in difficult times. Roller coaster times, that’s the stock exchanges. And this kind of cacophony coming up from politicians is absolute madness. It is naive to hear these assumptions and suggestions from politicians to say what can we do to get rid of the problems. It is no solution to say: Italy, please sell your gold, it’s no solution.”
Around Europe trading was very volatile with markets see-sawing between gains and losses.
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.
European Central Bank chief Jean-Claude Trichet confirmed that the ECB was actively buying bonds in the secondary market, but not directly from the governments. He did not specify which countries’ bonds, but he is likely to be talking about Spain and Italy.
Asian markets remain under pressure. They closed on Tuesday having made further heavy losses.
Japan’s Nikkei fell 1.7 percent, South Korea’s Kospi lost 3.6 percent, and Hong Kong’s Hang Seng shed 2.8 percent having been down over seven percent at one stage.
But would they have been in an even worse state without state pension funds moving to buy up shares as they still have faith in the region’s growth prospects.