UK shares bounce back

THE UK's leading shares bounced back from yesterday's market turmoil today after a late rally on Wall Street cheered investors.

THE UK's leading shares bounced back from yesterday's market turmoil today after a late rally on Wall Street cheered investors.

The FTSE 100 Index was 87.9 points higher at 5501.4 - or 1.5pc - in early trading amid expectations of interest rate cuts from the US Federal Reserve tonight to combat the growing credit crisis and aid a faltering US economy.

Stock markets have been shaken by the rescue and cut-price sale of US investment bank Bear Stearns, but Wall Street ended a volatile session in positive territory on hopes of the move, which could see US interest rates fall by as much as 1pc.

Today's upbeat start came after a major sell-off wiped £51 billion from the value of the UK's biggest companies yesterday.


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On a dramatic day which saw the Bank of England pump an extra £5 billion into frozen money markets, the Footsie tumbled 3.9pc to its lowest level for more than two years.

But the strong US finish also led to modest gains in Asian stock markets overnight, as global stock exchanges take their lead from Wall Street.

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Martin Slaney, head of derivatives at GFT Global Markets, said: "Stocks continue to be steered by the US markets, and a late rally in US stocks yesterday looks set to restore some confidence to European investors."

But other City watchers warned of further uncertainty ahead, as major US investment banks reporting results this week could also unveil billions more in write-offs on the mortgage-backed investments at the centre of the credit crisis.

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