China hopes ease stock markets
June 25, 2013
European shares, which had slipped for four consecutive trading days, steadied on Tuesday, with the pan-European FTSEurofirst 300 index gaining almost 1 percent in early trading.
Britain's top share index, the FTSE 100, was up 40 points, or 0.7 percent, while Germany's DAX index also opened 0.7 percent higher after slumping a staggering 6.5 percent since the middle of last week.
The stock market gains in Europe were prompted by a late recovery in Asian shares outside of Japan, which were able to turn around massive losses seen in earlier trading Tuesday.
China's CSI300 of leading A-share listings in Shanghai and Shenzhen ended down just 0.3 percent after it had already been down by 6 percent as the bear run in China had initially seemed to continue.
The Shanghai Composite index slipped 0.2 percent, paring early losses of 5 percent.
Traders attributed the recovery to rumors that the Chinese central bank might use a news conference later on Tuesday to address the share market turmoil and the liquidity problems in China's banking sector.
China is pursuing restrictive monetary policy, fearing that a further expansion in credit will fuel bad investments and undermine the country's long-term growth prospects. However, the policy has led to a liquidity squeeze which is threatening short-term growth in the world's second largest economy.
uhe/dr (Reuters, dpa)