US shares stage a rebound

London traders are looking to the US for direction

US stocks have staged a rebound, partially recouping sharp losses earlier this week, but European stocks are still in the doldrums.

US markets found some support from the US central bank's decision to leave interest rates on hold at 1.75%, announced at 1815 GMT on Tuesday.

The blue-chip Dow Jones index closed 0.29% higher at 9,836.55 while the Nasdaq settled 0.3% lower at 1,573.82.

The Nasdaq index - where many of the world's most important technology firms are listed - fell more than 2% on Monday, sending shares around the world lower.

European woes

European share indexes were down again on Tuesday, with technology, telecoms and media shares (TMTs) taking the brunt of the slump.

London's FTSE 100 index of leading shares settled 83 points down at at 5,119.9, its lowest level since 28 February.

The leading indexes in Frankfurt and Paris also closed down on Tuesday, with the media firm Vivendi Universal closing down 3.2%.

Deutsche Telekom and its French counterpart France Telecom both hit fresh all-time lows.

Oil pressure

US investors have been shaken by the recent round of corporate results which failed to deliver convincing proof that the economic recovery is truly underway.

Part of the problem has been the change of fortune for the heavyweight oil companies.

While energy giants such as BP, Shell and TotalFinaElf had previously been helping to offset losses from TMTs, all three firms fell more than 2% on Tuesday.

The sudden bearish stance on oil stocks reflects Iraq's decision to lift its self-imposed export embargo, weakening the outlook of crude oil prices.