Shares in Europe and the US have risen, recovering some of the ground lost on Monday when markets saw the biggest falls since the 2008 financial crisis.

London’s FTSE 100 is up 2.4%, after a 7.7% drop in the previous session, while US markets opened up 2%.

Markets were battered on Monday in reaction to the threat of an oil price war between Russia and Saudi Arabia.

But after falling as much as 30% on Monday, oil prices have rebounded slightly, with Brent crude rising 8%.

On Monday, the major US stock indexes fell so sharply at the start of trading that the buying and selling of shares was halted for 15 minutes, as a so-called “circuit breaker” aimed at curbing panicky selling came into effect.

However, in early trade on Tuesday the Dow Jones Industrial Average was up 2.7%.

The main share indexes in France and Germany have also risen, climbing nearly 2%.

The response has been a fairly standard one when it comes to stock market behaviour, said Kathleen Brooks, director at Minerva Analysis.

“Markets are so emotional, it’s unbelievable,” she said. “Act first, think later. This was the same in 2008, you have these massive declines and then the market is on pause.”

She said she thought markets would recover eventually, as “if you look at long-term charts they always recover”.

However, in the short term, “we could see another decline if we don’t see the stimulus that’s required. We need to hear more positive things because that’s when stock markets go up.”

Source: BBC News


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