As Europe’s stock markets ended a stormy week, the optimists seem to be winning out for the moment as share indexes ended substantially higher.
The rally reflected reduced fears among traders about the recession, but there was still plenty of volatility and veteran analyst Russell Jones believes it will last some time: “The message from previous periods of credit disruption over the course of history has been that downturns do tend to be prolonged, very difficult to get out of. So I think the world economies are facing a very tough time for at least the next 12 months.”
This week the EuroStoxx50 index rose 10 percent on Monday and 2.5 percent on Tuesday: it fell 6.5 percent on Wednesday and another 5.6 percent on Thursday before rebounding on Friday, ending up 6.02 percent.
It is all very unsettling for investors, some of whom sought guidance at an investment forum in Paris. One exhibitor with an online trading company said: “Right now for us business is booming. There are lots of people who want to get back into the market and try to make a profit from this volatility.”
The financial world is now looking ahead to a weekend meeting between the US and French presidents which will look at ways to reform a crumbling financial system.