ISEQ inches upward, FTSE still swinging

The ISEQ index of Irish shares saw an upward swing this morning after yesterday's bruising losses.

The ISEQ index of Irish shares saw an upward swing this morning after yesterday's bruising losses.

The index was up 72.7 points this morning, reversing yesterday's trend, which saw the index close more than 300 points down.

In the UK, bruised investors experienced more volatility today as the crisis-hit London market swung between positive and negative territories.

The FTSE 100 Index was as much as 35 points lower in early trading before later lifting 73.3 points to 5932.2.

The 1% gain follows a late recovery on Wall Street last night but represents a fraction of the losses seen yesterday in the bloodiest day yet in the current market turmoil.

The FTSE 100 Index lost more than 4% yesterday – its worst percentage fall since March 2003 – wiping nearly £60bn (€88.2bn) off leading stocks.

But the financial sector returned to favour today with mortgage lender Northern Rock, investment firms 3i and Invesco, and mining stocks all seeing gains of more than 4% after heavy falls yesterday.

In the US, Wall Street recouped almost all of its early losses after bargain hunters looked to pick up cheap shares.

However Asian markets were under pressure as Japan’s Nikkei index recorded its biggest points fall for seven years – worse than the 9/11 terrorist attacks in 2001.

The Footsie index has lost 12.5% in the past month, fuelled by worldwide concerns about the exposure of financial institutions to the collapse in the US sub-prime mortgage market. These fears have led to a more cautious approach from lenders, putting pressure on credit markets.

CMC Markets trader Adam Neal, who had expected the Footsie to open more than 80 points higher, said: “Some deep flaws still remain in the credit market across the Atlantic and the impact this is having elsewhere looks set to continue being felt for some time yet.”

The Federal Reserve and other central banks have been pouring cash into their banking systems since the end of last week. But the injections have so far failed to ease investor concerns.

Some estimates suggest $300bn (€224bn) of loans could be at risk because of the sub-prime crisis, but at the moment investors do not know the exact scale of the problem.

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