Investors snapping up cheap stocks
London's FTSE 100 Index pulled out of its nosedive yesterday as investors moved back in to buy cheap stocks after six days of heavy losses.
The Japanese yen eased back after reaching its highest level against the US dollar since the Second World War, a spike blamed on speculators and moves by Japanese investors to bring funds home to cover damage caused by the country's earthquake and tsunami.
Speculation that an emergency meeting of G7 finance ministers will see action to calm financial markets helped stocks steady across Europe, with the FTSE up nearly 1%.
The UK's benchmark index had fallen for six sessions in a row, yesterday plunging another 1.7% to its lowest level since the end of November.
But talk of G7 intervention offered some respite, with European indices also benefiting as the Cac 40 in France rose 0.8% and Germany's Dax lifted 1.2%.
Japan's central bank pumped another 6 trillion yen (£47.4 bn) into jittery money markets after the yen hit its record highs against the dollar.
The Nikkei 225, which fell heavily on Monday and Tuesday before a rebound yesterday, slipped 1.4%. But the decline was not as bad as earlier in the session.
Investors have been swamped with unsettling news in recent days with unrest in Bahrain and disappointing US economic news adding to the Japanese worries.
Joshua Raymond, market strategist at City Index, said investors were being tempted back into steadier markets.