VARIOUS: All eyes on Wall Street after markets around the world trim losses caused by Tuesday's global stock slide

European shares trimmed earlier losses on Wednesday (February 28), leaving investors to focus on the Wall Street opening after a global stock slide that saw some of the largest market drops in recent years. Wall street saw its biggest drop since September 11, 2001 attacks on Tuesday (February 27). Currency markets also regained some poise, with the yen taking a breather from the previous session's lightning rally to 10-week highs versus the dollar when investors unwound yield-dependent yen carry trades in a bid to avert risk. China's main Shanghai stock index, whose 9 percent dive on Tuesday on regulatory concerns was cited by some as sparking the global selloff, bounced back almost 4 percent. Market nerves jangled as the factors behind investor worries were still in place, such as uncertainty over U.S. monetary policy due to soft economic data and tensions over Iran's nuclear programme. Although a precarious calm descended on stock markets global stocks were still deep in negative territory and investors aimed to cut risk further as volatility measures skyrocketed. Nish Kotecha, senior partner and founder of Sphere Partners LTD told Reuters in London, "This is a pure result of global capital flows. You know China and India have been the hot beds of market opportunities for the last year or so. The Indian market is up significantly as is the Chinese market which has done extremely well and they have been the core of opportunities which global investors have seen. So the panic, which are very different in both those markets, have has caused a reaction into Europe and into the U.S.," he said. The FTSEurofirst 300 index of top European shares was down 1.19 percent at 1,488.37 points, up from an intraday low of 1,473.66 -- having extended Tuesday's slide by up to 2 percent within an hour of the opening bell. Kotecha does not see the correction having a long-term affect. "So I hope it does bring some sense back into the market in the sense that what the opportunities are and what is fair value but I certainly don't see the market impacted more than short term on this China news." U.S. stock futures were pointing to a firm open, although trade had been choppy throughout the European morning. The two-day sell-off around the world saw the MSCI world stock market index -- which had risen more than 4 percent this year as recently as Monday -- lose all its gains for the year.

ITN Source | March 1, 2007

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