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Last Updated:  Wednesday, 2 April, 2003, 21:17 GMT 22:17 UK
Markets surge after military advance
Trader watches Germany's Dax market
Markets are still driven by war news
Stock markets in the US and Europe have risen sharply after coalition troop advances towards Baghdad raised hopes of a swift end to the conflict.

In New York, the Dow Jones index rose sharply as soon as the Wall Street markets opened and ended the day 215 points - or 2.7% - higher at 8,285.

The Nasdaq technology index also performed strongly, rising by almost 4% during the day.

The strong gains were also reflected in Europe where London's FTSE 100 index of leading shares closed 67 points - or 1.9% - higher at 5,353.

Germany's Dax leapt 5.7% higher while in Paris the Cac 40 closed with gains of 4%.

Oil price drop

Oil prices continued to fall after a potentially crippling strike in Nigeria was averted at the last minute and fears over a protracted conflict in Iraq eased.

"The war appears to be progressing better than expected," said a London crude oil broker.

"It's the first good news on the war front from the US perspective since the war began."

The price of US light crude had fallen $1.43 to $28.4o a barrel by 1815GMT, while Brent crude dropped $1.11 to end at $25.25 a barrel.

Wake-up call

"It's remarkable how the mood has shifted this week from pessimism to reasonable optimism, and it's all got to do with perceptions about how the war is going," said David Thwaites, European equities strategist at BNP Paribas.

However, some analysts warned that the volatile markets would not be able to sustain the gains in coming weeks.

"Investors could get a wake-up call once (company) first quarter results start coming through later this month," said Rolf Elgeti, a strategist at Commerzbank.

Virus fears

In Asia, the Hang Seng index of leading Hong Kong shares closed up 0.7%, or 57 points, at 8,654, while the Nikkei 225 in Japan closed up 83 points, or 1%, at 8,070.

But analysts said the spread of the mystery pneumonia-like virus - which has killed at least 66 people worldwide and infected over 1,900 others - could hit economic growth in the region.

"People are still worried about fresh outbreaks. First it was in the hospital and then in the community ," said YK Chan, investment strategist at VC CEF Brokerage.

"People are staying at home. Every sector of the economy will be affected to some extent."




SEE ALSO:
Stock market moves explained
25 Mar 03  |  Business


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