VARIOUS: INVESTORS SNATCH UP U.S. AND EUROPEAN STOCKS AND PUSH OIL PRICES TO THREE-MONTH LOWS AMID HOPES FOR A QUICK WAR IN IRAQ

Record ID: 648002

  • Title: VARIOUS: INVESTORS SNATCH UP U.S. AND EUROPEAN STOCKS AND PUSH OIL PRICES TO THREE-MONTH LOWS AMID HOPES FOR A QUICK WAR IN IRAQ
  • Date: 13th April 2003
  • Summary: (EU) LONDON, UNITED KINGDOM (MARCH 21, 2003) (REUTERS) CHART OF FTSE 100 INDEX RISING
  • Embargoed: 28th April 2003 13:00
  • Keywords:
  • Location: NEW YORK, UNITED STATES, LONDON, UNITED KINGDOM AND FRANKFURT, GERMANY
  • City:
  • Country: USA
  • Topics: Industry
  • Reuters ID: LVA19QIYITTXL246DEBFPEAIDEZM
  • Story Text: Investors have snatched up U.S. and European stocks and pushed oil prices to three-month lows amid growing hopes for a quick war as U.S. and British forces charged into Iraq against little resistance.
    Stocks climbed on Friday (March 21, 2003), driving the blue-chip Dow toward its eighth straight session of gains with investor hopes growing for a swift war as U.S.-led forces barrel through southern Iraq.
    The White House warned the war in Iraq could still be "lengthy and dangerous" and there were "many risks ahead" for U.S. and British forces. But investors kept up hopes for a quick war as U.S. armoured columns raced toward Baghdad and American troops seized two strategic airfields in Iraq.
    The Dow Jones industrial average climbed 80 points, or
    97 percent, at 8,366. The broad Standard and Poor's 500 index jumped 7 points, or 0.80 percent, to 882. The tech-laced Nasdaq Composite Index advanced 9 points, or 0.70 percent, to 1,412.
    But market analysts warn the gains might not be long-lived.
    "I think it is inevitable that we will see in the short-term, and the short-term is defined as the next two to three weeks, some further upside in equity markets. Now there's one big assumption behind that statement which is that the war in Iraq or any resolution to the Iraq crisis is reasonably quick. If this war drags on, or if the diplomacy drags on, clearly markets will fade. I think however, taking a three to six months time horizon it is fairly inevitable that markets will fade in any event because what we're seeing here is clearly a relief rally," said Bob Parker, Deputy Chairman, Credit Suisse Asset Management.
    British blue chips also motored to a two-month high. By 1330 GMT the FTSE 100 index of blue-chip shares was up 76.6 points or two percent at 3,842.3 points, its highest intraday level since January 20.
    Analysts said the market might have got ahead of itself by pricing in a rapid end to war.
    Market watchers saw a possible slowdown in the FTSE rebound once investors eyed an end to the conflict and turned their attention to weak UK economic data such as recent retail sales.
    "After the Iraq situation is resolved one obviously has to ask the question, well what will dominate markets? And the answer is economic fundamentals and at least I think until the end of this year, probably going into early 2004, we still have an environment of weak economic demand. And that is not going to support a durable sustained equity market rally. So I think this could be a short-term event," said Parker.
    Advancing U.S.-led forces in Iraq helped the German DAX leap on Friday.
    The DAX traded up 3.7 percent at 2,699 points by 1545 GMT, with Deutsche Bank's 6.25 percent rise and a 4.5 percent stronger Siemens giving the most push.
    Although the market would hinge on the situation in Iraq, some saw room for further recovery next week.
    Shares benefited from speculation of a prompt end to the conflict.
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