Markets trade in narrow range

09:16, January 26, 2010      

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European stock markets traded in a narrow range yesterday as expectations of a rebound on Wall Street helped limit ongoing fallout from President Barack Obama's plan to curb bank risk-taking.

The FTSE 100 index of leading 100 shares was up 16.60 points, or 0.3 percent, at 5,319.59 while Germany's DAX fell 14.34 points, or 0.3 percent, to 5,680.98. The CAC-40 in France was 7.54 points, or 0.2 percent, lower at 3,813.24.

Wall Street was poised to recoup some of Friday's big losses - Dow futures rose 78 points, or 0.8 percent, at 10,229 while the broader Standard & Poor's 500 futures rose 9.2 points, or 0.8 percent, at 1,100.20.

Stocks have been on the retreat since last Wednesday, when Obama announced his intention to limit the size of US banks and imposing restrictions on their more risky trading activities.

In essence, his proposals may mean the break-up of some of the US banks but the details need to be ironed out between the White House and lawmakers in Congress - at a time when the economic recovery is far from assured and Obama's Democrats face a rejuvenated Republican Party in midterm elections later in the year.

"The uncertainty surrounding the detail of the reforms is making the markets extremely nervous," said Robert Pike, a trader at Spreadex.

There's now growing talk in the markets that the President's plan may have brought an end to the 10-month bull run in equities, which has seen most of the world's main indexes recover all their losses since the collapse of Lehman Brothers in September 2008.

Earlier in Asia, Japan's Nikkei 225 stock average fell 77.86 points, or 0.7 percent, to 10,512.69.

Elsewhere, South Korea's market dropped 14.15 points, or 0.8 percent, to 1,670.20. Australia's market was down 0.7 percent.

Oil prices lingered below $75 a barrel, with benchmark crude for March delivery down 7 cents to $74.47 a barrel. The contract lost $1.54 to settle at $74.54 on Friday.

The dollar was down 0.1 percent at 90.24 yen while the euro was up 0.2 percent at $1.4193.

Source: China Daily
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