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European officials struggle to calm markets
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CBC News- European politicians and regulators are taking steps to tackle the fear and uncertainty that have shaken investor confidence and helped to spread market turmoil around the globe.
French President Nicolas Sarkozy said Thursday he would meet German Chancellor Angela Merkel on Tuesday for talks on solutions to Europe's financial difficulties. French regulators warned they would investigate and prosecute anyone found to be spreading rumours and profiting from them.
The New York Times reported that a European ban on short-selling was imminent. Short-selling involves attempting to profit by betting on the decline in the price of a stock. The practice has been blamed for increasing volatility. So far, Greece is the only European country to implement a ban on short-selling.
In Europe, Britain's FTSE 100, Germany's DAX and the CAC-40 index in Paris bounced in and out of negative territory in late-session trading on Thursday.
Investors remained nervous even though three credit rating agencies reaffirmed their triple-A verdict on French bonds.
"We are seeing the same reaction now that we have seen in recent days — the rally has stalled with many traders unwilling to believe that this is anything more than just another dead cat bounce," said David Jones, chief market strategist at IG Index.
Societe Generale, France's second biggest bank, saw its share price tumble 15 per cent on Wednesday amid rumours that it was in a desperate financial position because of its exposure to eurozone economies. In early afternoon trading Thursday, Societe Generale stock was off another five per cent.
TSE, Dow move higher
North American markets opened higher Thursday with volatility again being the theme. The S&P/TSX composite index was up 31 points at 12,230 at 10:45 a.m. ET, while the Dow Jones industrial average surged 275 points to 10,995 — meaning that Wall Street would not immediately be adding to Wednesday's 520-point sell-off.
The U.S. market benefited from news that fewer Americans joined the ranks of the unemployed last week.
Hong Kong's Hang Seng index fell 1 per cent to 19,595.10, but China's main index in Shanghai rose 1.3 per cent to 2,703.90.
Japan's Nikkei 225 index slipped 0.6 per cent to close at 8,981.94 as a strengthening yen clobbered Japan's crucial export sector. Honda Motor Corp. and Nissan Motor Corp. each lost 3.5 per cent.
Canadian Finance Minister Jim Flaherty says theglobal economic uncertainty poses "obvious risks" to the country, but it won't change the government's plan to slash spending and balance the books.
Similar sentiments came Thursday from Britain's Treasury chief. George Osborne said the economic recovery "will take longer and be harder than had been hoped." But he told British parliamentarians that his government's austerity measures were the right way to go.
Gold futures were down $28 Thursday morning at $1,755 US an ounce after the Chicago Mercantile Exchange raised margin requirements on futures contracts.
Oil futures were up $1 at $83.89 US a barrel in early Thursday trading. Natural gas futures were off two cents to $3.98 US.
The Canadian dollar was up 0.44 cents to 100.96 cents US just before 10:50 a.m. ET Thursday. On Wednesday, the loonie tumbled more than 1.6 cents against the U.S. greenback amid extreme volatility on global currency markets.
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