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Tuesday, 15 October, 2002, 21:18 GMT 22:18 UK
Share prices storm back
Stock trader in Frankfurt
The smiles are back - but for how long?
The world's main stock markets have bounced back after promising US corporate news helped counter concerns over the economic effects of the weekend bomb blast in Bali.

On Wall Street, the Dow Jones index of leading US shares opened strongly and kept rising, eventually closing up 4.8% at 8,255.68.

European stocks also had a good day. In London, the FTSE 100 index closed up 198.7 points at 4,130.3 - an increase of more than 5% and its biggest percentage rise since April 1992.

In Paris, the Cac 40 closed nearly 7% higher at 3,086, and Frankfurt's Dax index ended up nearly 7% at 3,048.3.

Earlier in Tokyo, the Nikkei 225 index closed up 3.6% at 8,836 points.

Corporate cheer

In the US, shares in the finance giant Citigroup jumped $3.84 to $34.15 after it posted a strong rise in third-quarter profits.

And car maker General Motors saw its shares jump $3.44 to $36.70, despite lowering the valuation of its stake in Italian car maker Fiat by $2.2bn.

"It feels like we're starting to get momentum behind us," said Evan Olsen, head of equity trading at Stephens Inc.

"Citigroup and GM were a great way to start the day. People are starting to get more confidence."

But there was a sharp reminder that market sentiment remains fragile when chip maker Intel announced worse-than-expected results after normal trade had ended.

Intel's shares tumbled from its closing price of $16.52 to $14.70 in after-hours trade.

Finance favoured

In London, financial stocks provided the main thrust for third largest percentage rise in the FTSE 100's history.

Banking stocks were helped by Citigroup's figures. Royal Bank of Scotland jumped nearly 11% to 15.15, Abbey National climbed 10.8% to 685p and Barclays rose 8% to 457p.

Insurers also had a good day, with Royal & Sun up 9.8% to 106.75p and Prudential climbing 9.4% to 452.5p.

But analysts warned the market was not out of the woods yet.

"We've had a modicum of good news from US companies news and positive news on the UK inflation front, which has laid to rest fears that deflation is around the corner," said Mark Embley, fund manager at Singer & Friedlander Investment Management.

"But it's hard to see how this rally will be sustained.

"There are still concerns, not least of which are worries about the timing and extent of any strike on Iraq."

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 ON THIS STORY
Bob Brusca, North America Securities
"It's far too early to say whether this will be sustained"
The Markets: 9:29 UK
FTSE 100 5760.40 -151.7
Dow Jones 11380.99 -119.7
Nasdaq 2243.78 -28.9
FTSE delayed by 15 mins, Dow and Nasdaq by 20 mins
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15 Oct 02 | Business
14 Oct 02 | Business
11 Oct 02 | Business
09 Oct 02 | Business
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