G20 fail to ease tensions in markets

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G20 fail to ease tensions in markets

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G20 leading developed and developing economies said they will work together to stabilize markets.

24 September,2011 04:23 am

Stock markets in Europe and the US recouped some of their previous days hefty losses Friday but investors remained skeptical about whether the worlds leading economies will come up with a coordinated plan to shore up the global economy.Fears over another recession in Europe and the US contributed to Thursdays slide, which prompted the finance ministers of the Group of 20 leading developed and developing economies to say they will work together to stabilize markets.Their pledge to take all necessary actions to preserve the stability of the banking systems and financial markets and to make sure banks have the cash they need to pay their day-to-day expenses, helped cushion markets from a repeat of Thursday.But investors will be looking for more during the weekend meetings of the International Monetary Fund and the World Bank.I think many in the markets are no longer reassured by platitudes, we want to see action and not just words more walking the walk and less talking the talk, said Louise Cooper, an analyst with BGC Partners. The G20 communique was more eloquent on the problems facing the world than the solutions to be found.In Europe, Frances CAC-40 closed up 1 percent at 2,810.11 while the DAX in Germany rose 0.6 percent to 5,196.56. The FTSE 100 index of leading British shares ended 0.5 percent higher at 5,066.81.Wall Street pushed higher too the Dow Jones industrial average was up 0.1 percent at 10,745 while the broader Standard & Poors 500 index rose 0.5 percent to 1,134.Despite the modest gains Friday, the worries are piling up for investors: a U.S. Federal Reserve warning earlier this week that the American economy is in significant difficulty, a raft of downbeat European and Asian economic indicators, and the continued concern over Greeces debt.The markets are eagerly awaiting a resolution or at the minimum, a more rigid strategy to reduce Greeces debt liabilities, said Giles Watts, head of equities at City Index.Bank stocks have led the way down in recent days as investors fret over their potential exposure to the debts of Greece. Those fears have become more acute as the markets increasingly price in the likelihood of a Greek default.