Global Financial Crisis: Gold Coast business hammered as credit crunch hit business

Euphoria returned to global markets, but analysts said it was not yet time to begin popping the champagne corks.

GOLD COAST BULLETIN

Saturday September 20, 2008

Euphoria returned to global markets, but analysts say it was not yet time to begin popping the champagne corks.

Plans by the US government to isolate bad debt in a special purpose vehicle was seen as a positive step in stabilising the climate of fear that emerged, and futures markets were indicating another strong rise ahead for the Dow.

A second positive session on Wall Street could help the Australian market recover more of the week’s losses on Monday after the ASX 200 surged 198 points to 4805.

Gold Coast Bulletin, Saturday September 20, 2008

AMAZING OFFER: GET A SAMSUNG GALAXY TAB A 8.0 WITH THIS BULLETIN SUBSCRIPTION (T & Cs apply)

The 4.3 per cent rise was the market’s biggest one-day gain in nine months.

But while the surge came on the back of global central banks injecting more than $US500 billion in the previous week to thaw out the frozen credit markets, the ASX 200 was still down 2 per cent, or 100 points, from its opening six days earlier.

The gains could typically be seen as a ‘dead cat’ bounce with shares around the world maintaining their bearish, downward trend.

The benchmark ASX 200 index remained 30 per cent below its November 2007 peak of 6851 points.

Resurgent investors also sent the major Asian markets up strongly with the Japanese Nikkei rising 3.7 per cent and Hong Kong’s Hang Seng jumping 8 per cent.

European markets surged, with London’s FTSE 100 adding 6 per cent in the first half hour.

AMP Capital Investors chief economist Shane Oliver said it would ‘remain rough’ for the next few months but it looked as if the ‘cancer had been cut out’ and a recovery might have started.