European markets went haywire in early trading Tuesday as investors reacted to a second straight day of Asian declines and awaited the reopening of Wall Street. After a disastrous showing for the Nikkei, Hang Seng and other Asian bourses, European markets plunged: the FTSE 100 dropped 200 points minutes after opening. Yet shares in London rallied amid rumors of emergency rate cuts by the three main central banks.
Talk of a coordinated emergency rate cut by the Fed, the ECB and the Bank of England drove London shares back up, and after 3 hours of trading the FTSE was up 0.6%. In Frankfurt, however, the DAX remained slightly down, having recovered somewhat from declines of 3%. All the European markets are waiting anxiously for the start of trading in New York, where markets were closed yesterday.