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World stocks buoyed by central banks action
Global stocks remained buoyed by central banks action as euro finance ministers meet again
By The Associated Press

LONDON (AP) ' Global stocks remained buoyed by the decision of five top central banks to provide unlimited amounts of dollar loans to the banking sector, easing one of the concerns driving the recent turbulence in financial markets of late.

Coming on top of mounting hopes that Greece will not be defaulting on its debts anytime soon, the news helped ease concerns over the impact of Europe's debt crisis on banking stocks.

"This move doesn't necessarily make money cheaper or increase the amount of money in the system, but it does help solve the growing problem of a global financial system that was becoming regionalized," said Kit Juckes, an analyst at Societe Generale.



Following big gains Thursday, European stock markets remained relatively well-supported, though France's CAC-40 was a tad lower as its banks retreated slightly from their big gains in the previous session. Concerns over their ability to get their hands on dollars had been growing in recent days, adding to market fears over the escalating debt crisis.

The CAC-40 was 0.4 percent lower at 3,032 while Germany's DAX rose 0.7 percent 5,544. The FTSE 100 index of leading British shares was 0.1 percent higher at 5,341.

Asian shares had earlier rallied hard as they followed the advances posted in Europe and the U.S. on Thursday. Japan's Nikkei 225 stock average did particularly well, ending 2.3 percent higher at 8,864.16. That was the highest close for the benchmark since Sept. 2 and the biggest percentage and point gains for a day in around six months, according to Kyodo news agency.

Though the move has doused down one of the worries afflicting markets over the past few weeks, investors remained cautious about Europe's ability to deal with Greece, in particular.

"If anyone thinks it has eased the problems in the eurozone they could well be disappointed given it deals with the symptoms but not the underlying problems," said Michael Hewson, market analyst at CMC Markets.

Greece's debts stand at about 150 percent of GDP and the markets are increasingly of the view that with the Greek economy shrinking, the banks will have to accept they're not going to be paid back all that they are owed. As a result, the main market debate is what sort of writedown ' the so-called haircut ' financial institutions who lent Greece the money will have to accept.

The focus is now shifting to talks in Poland between U.S. Treasury Secretary Timothy Geithner and his European counterparts, which run through Saturday, about coordinating efforts to prevent Europe's debt crisis from derailing a global recovery.

"EU finance ministers meeting in Poland today will hopefully finally shed some light on the question on everybody's lips ' how is Europe going to deal with Greece," said Simon Furlong, a trader at Spreadex.

In the currency markets, the euro lost some ground after big gains the day before. It was trading 0.6 percent lower at $1.3790.

Oil prices also remained relatively well-supported alongside stock markets ' benchmark oil for October delivery was up 31 cents at $89.71 per barrel in electronic trading on the New York Mercantile Exchange.


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