Stockmarkets still sliding

The European stockmarkets continued to fall on Friday afternoon, reversing a modest comeback earlier in the day.

Tokyo also fell to a fresh 15-year low after the markets closed.

By 1527 GMT the FTSE-100 index was down 57.7 points at 5850.9.

During the morning, the index had managed to climb a couple points before a low opening on Wall Street knocked it down again.

The Nasdaq composite index fell 76.10 points to 2,107.27 after opening.

In Frankfurt and Paris, small gains were also lost.

Both the blue-chip Dax index and its French counterpart, the Cac-40, were down 0.88% during afternoon trading.

Tokyo still sliding

Tokyo's Nikkei index closed down 419.86 points to 12,261.80.

Taking its lead from a slide on most of the world's leading stock markets on Thursday, the Japanese index fell more than 3% to its lowest level since 31 July 1985.

Despite a late comeback by the US tech index Nasdaq just before it closed, Japan saw a sell-off in tech stocks, including Oracle Japan.

The data at home is certainly not sweet and investors have little reason to believe the Nasdaq won't dip further

Nobuaki Kurisu
Sumisei Global Investment Trust Management

On Thursday, the index had closed more than 200 points lower at 12,681.66, its lowest level since 20 November 1985.

"The data at home is certainly not sweet and investors have little reason to believe the Nasdaq won't dip further," said Nobuaki Kurisu, chief fund manager at Sumisei Global Investment Trust Management.

The heavy falls in Tokyo came even though the Bank of Japan had announced an interest rate cut on Wednesday.

The cuts were not significant enough to propel the markets into any sort of recovery.

With interest rates already so low, the bank is wary of any further cuts that would leave it with a 0% interest rate and no weapons to combat future falls.

Political uncertainties have also added to the market's problems.

Prime Minister Yoshiro Mori is currently facing a second no-confidence motion in the Japanese parliament.

Nasdaq comeback

Late on Thursday, the Nasdaq managed to claw back some gains, after sinking to two-year lows earlier in the day.

The Nasdaq ended 31 points higher at 2,183 points. It had slumped to the two-year low of 2,093.76 just a few hours earlier.

Investors are hoping that the surprise end of day rise - sparked by positive comments from computer giant International Business Machines - will help lift markets on Friday.

Investor confidence has been steadily eroded in the first two months of this year, and key indexes are falling to new lows, mainly led by plunging telecoms and technology stocks.

Policy makers have found that even interest rate cuts are failing to lift the markets, such is the depth of investor gloom.

UK leads Europe's woes

Although the UK shares have made a slight rebound on Friday morning, the picture on Thursday was different.

The FTSE 100 slumped to its lowest level since October 1999 when it traded below 5,900 during the day. It closed marginally above this level.

Germany's Nemax 50 index of technology stocks also hit a new all-time low, down 4.32% to 1,870 points in morning trade on Thursday.

"Sentiment is at rock bottom," said Simon Rose, a trader at KBC Bank Deutschland.

Germany's benchmark Dax closed on Thursday 109.8 points lower at 6098.8, while the Paris Cac-40 index ended 26 points down.

Mr Greenspan's testimony

A speech by Federal Reserve chairman Alan Greenspan on Wednesday had also contributed to the worldwide slump.

Mr Greenspan had warned that the US slowdown was set to continue.

The Dow Jones Industrial Average managed to win back about 100 points, to close the day 45 points lower at 10,450.

Hints that the US manufacturing sector may have seen the worst of its downturn may bolster the traditional sector further on Friday.