10/09/2008
European stock index futures drifted higher in early trade on Thursday after opening slightly lower, indicating a positive start for stocks. At 0608 GMT, futures for the DJ Euro Stoxx 50, Germany's DAX and France's CAC were up between 0.3 and 0.8 percent. European shares sank to a near five-year closing low on Wednesday after highly volatile trade, shrugging off coordinated rate cuts by top central banks.
European governments had been struggling on Wednesday to contain the deepening world financial crisis, with Britain stepping in to help its hard-pressed banks and Russia shutting down its biggest stock market for two days. However the early boost to stock markets provided by the news that banks had cut their key interest rates by a half-percentage point soon dissipated amid severe stresses in lending markets.
Investors have been fleeing shares on worries that neither the Fed, nor other central banks, could move fast enough to stop the rising turmoil.
European indexes fell
In Britain, the FTSE-100 fell 5.2 percent, Germany's DAX dropped 5.9 percent, and France's CAC-40 dropped 6.3 percent. The British Treasury had earlier announced it would be investing up to 50 billion pounds (87 billion US dollars) in exchange for stakes in the country's largest banks and building societies, widen the amounts available through an existing short-term bank credit program 200 (b) billion pounds, and guarantee 250 billion pounds (437.5 billion US dollars) worth of short and medium-term debt.
The partial nationalization of some of the country's leading banks was supposed to put them on a "sound footing", said Prime Minister Gordon Brown, after Tuesday's precipitous collapse in banking stocks, most notably Royal Bank of Scotland PLC and HBOS PLC, shook already weak confidence in the financial system.
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