FRANCE/UK: EUROPEAN STOCK MARKETS BOUNCE BACK

Описание: (14 Jan 1999) Eng/French/Natsot

European stock markets bounced back solidly on Thursday after the panic set off by the Brazilian financial crisis.

The Paris Bourse began to recover gingerly after the steep losses it suffered on the back of Brazil's decision to devalue its currency.

Some traders thought nerves were steadier.

SOUNDBITE (French)
"Today we are at the level of +0.91% with a trade volume of around 500 million euros, so the trading activity begins with good signs, after the low index of yesterday."
SUPERCAPTION Jean-Baptiste Prevoteau, Department of Trading Operations

Early indications in futures trading showed the CAC 40 index of most actively traded french stocks opening 65 points , or 1.6% higher.

On Wednesday, the index fell 3.5% to close at 3958.72 points.

Although some investors regained confidence in the market after Wednesday's strong pullback, traders said volumes remain very low.

Within the first hour of trading in London on Thursday, the market veered between a fall of 51 points and a rise of 53 points.

Traders had braced themselves for further turmoil following the FTSE-100 Index of leading shares closing down 183.5 points, at 5850.1 on Wednesday.

There were fears that worldwide markets would be thrown into turmoil when Brazil's central bank president Gustavo Franco resigned, and the Brazilian government announced it was devaluing its currency by 8 per cent.

The Dow Jones industrial average was down overnight, while reaction from Asian markets has been mixed.

Despite initial feelings of panic, global markets appeared to be calmer on Thursday.

But some fear the worst could be ahead in days to come.

SOUNDBITE: (English)
"Well I'm afraid we are in this sort of bungey jumping market at the moment it just takes an element of nerves too, because of something like this, and you will see a two or three per cent drop off. What is interesting is how quickly they keep on picking up again. There will be more of these, around our markets we have got various mines bobbing around. Anyone of them can go off at anytime. Brazil went off yesterday, we've still got Russia, we've still got China, and of course other Japanese issues can come up easily as well. Anyone of those could cause other significant issues, but I think we have to wait until later in the year when hopefully the Japanese have taken significant action and start seeing the real growth in their economy and that will see then a part of a sustained growth around the world."
SUPER CAPTION: Justin Urquart Stewart, Corporate Development Director, Barclays Stock Brokers

For the time being though, the short-term global effects of Brazil's economic crisis seem to be manageable.

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