Contact:
Mag. My Hue McGowran
Phone: +43-1-81140-308
E-Mail: mcgowran@newsfox.com
| Pressbox | 
|
London (pte033/08.07.2005/14:44) - Experts today, Friday, said that the London underground and bus bombings will have little effect on the economy and earnings growth, even though the immediate affect was the gaining of stocks and bonds falling.
"Markets are going back to normal,'' said Christian Saalfrank, who manages $1.2 billion at Helaba Invest in Frankfurt. "I don't think we'll have many negative consequences.''
In London the Dow Jones Stoxx 600 Index rose 1.2 percent to 277.92 as of 11:25 a.m., rebounding from its biggest loss in almost a year. Benchmark German 10-year bunds rose 3.18 percent, up from a record low yesterday. The British pound fell on speculation that the attacks may hasten an interest-rate cut by the Bank of England http://www.bankofengland.co.uk/.
Last week's reports showed that European manufacturing growth is improving and factory orders are rising in Germany, the region's biggest economy, giving rise to optimism that economic growth may accelerate.
Despite the attacks, investors believe that growth in the euro zone may accelerate, spurred by a falling euro.
Since the bombings it is now likely that the Bank of England will lower interest rates for the first time in two years, said Marcus Hettinger, a currency strategist at Credit Suisse Group in Zurich.
"The probability of a rate cut in the U.K. has surely risen after yesterday's events and that's what the market is focusing on,'' Hettinger said. "The pound has a lot of risks at the moment and people are quick to sell it.''
According to estimates from the National Institute of Economic and Social Research, Britain's economy, Europe's second-largest, was expanding at the slowest pace in almost four years before the disaster.
(end)
|
|
