European markets make gains

European markets make gains

European markets have risen in early trading despite a sharp fall in Japanese markets today (February 12).

At close of trading the Nikkei 225 was down 4.8 per cent to 14,952.61 points, having fallen around 5.4 per cent earlier in the day.

But the FTSE Eurofirst 300 index is trading 1.6 per cent higher to 1,216, while the FTSE 100 has gained 1.3 per cent to 5,609.58 points.

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France’s Cac 40 index has also made gains in early trading and is currently up 1.6 per cent to 3,957.15.

Equity markets reacted to Federal Reserve chair Janet Yellen’s comments yesterday as she did not rule out the possibility of moving to negative interest rates in the US.

Financials were particularly hard hit by the global sell-off in equities over uncertainty around central bank policy.

The S&P 500 was down more than 1 per cent while European shares were dragged down by bank stocks.

Bernard Aw, market analyst at IG Group, said: “Market participants are naturally concerned whether the selloff across global equities will go on.

“I feel a significant factor hinges on how China reacts to the global market capitulation when onshore centres resume trade next week, after the week-long Lunar New Year celebrations. Needless to say, sharp declines in Chinese equities could trigger another bout of global rout, in a vicious feedback loop.”