Tokyo, London Markets Continue Rebound
Stock prices rallied today in Tokyo and London, continuing a financial market rebound based on the perception of reduced tensions in the Middle East. Oil prices rebounded.
Tokyo’s Nikkei Stock Average of 225 selected issues gained 569.00 points, or 2.26%, to close at 25,710.76. The index rose 976 points on Monday.
In London, where the financial markets were closed Monday for a bank holiday, shares advanced sharply following Monday’s gains elsewhere. Volume was light. The broad-based Financial Times-Stock Exchange 100-share index ended up 39.7 points, or 1.8%, at 2,126.1.
In Frankfurt, West Germany, profit-taking knocked shares sharply lower after Monday’s record 6% rise. The DAX 30-share index of leading West German shares ended off 36.91 lower at 1,617.89.
Share prices were lower in Paris following previous strong gains. The market waited for a new sense of direction with traders nervous and volumes thin. The CAC-40 index closed 19.14 points lower at 1,680.58 after Monday’s record rise of more than 5%.
After a slow start, oil prices rebounded in early trading today as the market reassessed Monday’s plunge as an overaction to reports that Iraq had ordered its ship captains not to challenge the U.S. blockade, analysts said.
“Peace is not at hand,” said Michael McDermott of Paine Webber Inc. in New York.
The benchmark West Texas Intermediate crude for October delivery had risen 80 cents by midday from Monday’s close to $27.70 a barrel on the New York Mercantile Exchange.
The price was $6.16 a barrel above the level prior to Iraq’s Aug. 2 invasion of Kuwait.
Unleaded gasoline for September delivery was up 1.70 cents to 89.25 cents a gallon, while September home heating oil had gained 1.90 cents by midday to 80 cents a gallon.
McDermott said that the $4-a-barrel plunge in the price for WTI crude Monday took the market back to where it was about a week ago and that he expected WTI prices to return soon to a range of $30 a barrel to $31 a barrel.
