Shares rebound on back of Libya reports

Stock markets in Europe and the US have rebounded, led by shares in energy firms, on hopes that fighting in Libya may soon end.

Shares rebound on back of Libya reports

Stock markets in Europe and the US have rebounded, led by shares in energy firms, on hopes that fighting in Libya may soon end.

London's FTSE 100 and the CAC in Paris were both more than 2.5% up by the early afternoon.

While in New York after last week's heavy losses, the Dow, Nasdaq and S & P all showed gains.

Tanks opened fire at rebels trying to storm Muammar Gaddafi’s main compound in Tripoli earlier today, although he appeared to have vanished a day after the lightning advance by his opponents into the city.

The international community meanwhile called on him to step down as euphoric residents celebrated in the Green Square, the symbolic heart of the Gaddafi regime.

Traders are looking ahead to a major speech this week by Federal Reserve chairman Ben Bernanke.

It was this time last year that Mr Bernanke unveiled a new round of quantitative easing by the US central bank and hopes are high that something similar may be on the cards in the speech on Friday after the recent run of poor US economic data.

However, the banking sector continued to act as a drag on the rally after Deutsche Bank downgraded the industry over global recession fears.

Gold – seen as a safe haven investment in times of economic and political uncertainty – hit new record highs, rising to $1,895 per ounce.

Gold mining giant Randgold Resources posted strong gains, with a rise of 185p to 6795p, on the back of strong gold prices, as did African Barrick Gold, up 13p at 548.5p.

Elsewhere, oil prices fell on speculation that Colonel Muammar Gaddafi’s 40-year rule in Libya is on the edge of collapse.

Brent crude in London fell nearly 2% to 107.05 US dollars a barrel, however US sweet crude was up 2% to 83.9 US dollars.

But this failed to deter traders from oil stocks with Cairn Energy up 12p at 293.4p and BP ahead 7.7p at 397.6p.

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