LONDON: US and European equities rebounded on Tuesday after fears over the possible collapse of Chinese property giant Evergrande sparked a rout across global markets. London stocks closed 1.0 percent higher, while Frankfurt added 1.2 and Paris 1.3 percent.
On Wall Street, the Dow Jones Industrial Average climbed 0.4 percent in morning trades, while the tech-heavy Nasdaq gained around 0.7 percent. Major European markets had fallen by around one or two percent on Monday, similar to drops seen across the Atlantic. But concerns that a collapse of Evergrande could send shockwaves through the global financial system appeared to have ebbed.
The picture was mixed in Asia on Tuesday, with Hong Kong closing up 0.5 percent, while Tokyo slumped 2.2 percent and Shanghai was closed for a Chinese public holiday. Evergrande founder Xu Jiayin said in a letter to staff that he "firmly believes Evergrande will be able to step out of the darkest moment soon".
Beyond the Chinese real estate saga, "Worries about stretched valuations, peak policy support, and political gamesmanship between - and within - the parties in Washington have kept the market's bullish bias in check," wrote Briefing.com analysts. Observers predict the US Federal Reserve will use its policy meeting beginning on Tuesday to set out its timetable for tapering the vast bond-buying monetary easing programme that has been a key driver of a global recovery for more than a year.
A battle in Washington to raise the US debt limit was also fuelling concern that the government could miss payments on its debt obligations, sparking a disastrous default. On the corporate front, shares in Universal Music, the world's biggest label with a lineup of megastars from The Beatles to Taylor Swift, surged on its stock market debut, giving the company a valuation exceeding $50 billion.
Key figures around 1530 GMT
New York - Dow: 34,116.49 points
FTSE 100: 6,970.24
Frankfurt: 15,313.05
Paris: 6,539.52
EURO STOXX 50: 4,087.92
Hong Kong: 24,221.54
Tokyo: 29,839.71
Euro/dollar: DOWN at $1.1723
Pound/dollar: DOWN at $1.3655
Euro/pound: DOWN at 85.85 pence
Dollar/yen: DOWN at 109.28
Brent North Sea crude: $74.21
West Texas Intermediate: $70.45.
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