Stability began to return to the world's shaky stock markets yesterday as Wall Street's recovery from the Monday collapse gathered momentum.
Share prices advanced around the world, smashing records for one-day gains on stock exchanges in Tokyo and London.
And share prices opened higher this morning on the Tokyo Stock Exchange, buoyed by Wall Street's rebound yesterday.
The 225-share Nikkei stock average, which posted a single-day record gain of 2,037.32 points yesterday, surged 792.58 points in the first hour of trading today, moving up to 24,739.98 points.
"A strong start in Tokyo largely reflected the market recovery in New York," said Hitomi Sakano, a spokeswoman for Nomura Securities Co., a major Japanese brokerage house.
The London Stock Exchange followed Wall Street upward in another volatile session and clawed back some of Monday's and Tuesday's record losses.
The Financial Times-Stock Exchange 100-share index closed up 142.2 points, or 8 percent, at 1943.8. The gain shattered the previous record one-day rise set May 8, when the index rose 48.6 points to 2126.5.
Volume was so heavy that it caused technical problems, forcing the exchange to stop computing the index at noon for three hours. Some 948 million shares changed hands, still below the record 1.189 billion shares traded Tuesday.
London dealers said there was strong buying interest in blue-chip stocks as investors sought bargains after the slump earlier in the week.
The Paris stock market, which had tumbled almost 10 percent Monday and edged up by less than 1 percent Tuesday, gained nearly 3.5 percent Wednesday in a strong showing.
Beside the boost from Wall Street, dealers said Paris shares also were lifted by the French government's announcement that it will postpone the sale of its shareholding in Matra SA until the stock market settles down. Finance Minister Edouard Balladur said the privatization of Matra, a major defense and electronics company, would be put off for "several days or several weeks." The government had planned to start the process next Monday.
The dramatic slide in the French market could complicate the Conservative government's plans to sell off large chunks of other state-owned companies.
In West Germany, the Bonn government labeled this week's market plunge a "temporary overreaction," and said international economic trends continue to be positive.
The chief government spokesman, Friedhelm Ost, said that despite huge stock losses Monday, world markets remain strong.
The sentiment was echoed by Jean-Claude Paye, secretary-general of the 24-nation Organization of Economic Cooperation and Development, who said panic in world exchanges was unjustified and the health of companies is generally good.
Earlier yesterday, prices on the Tokyo Stock Exchange soared. The 225-share Nikkei stock average rocketed 2,037.32 points -- its largest one-day advance ever -- to close at 23,947.40.
Both the Tokyo and London exchanges suffered record plunges in previous sessions, with the London index tumbling 250.7 points Tuesday and 249.6 points Monday and the Nikkei falling 3,836.48 points Tuesday.
Traders in Tokyo said buy orders swelled against the backdrop of the Wall Street revival, stability in the foreign exchange markets and the prime rate reductions of two major U.S. banks on Tuesday.
On other foreign markets yesterday, prices recovered in Australia but continued to fall in Taiwan.
Most stocks rose in Sydney, Australia, where the all-ordinary shares index, the broadest market indicator, was up 1.2 percent following a massive 24.9 percent plunge Tuesday. The recovery was held back by a drop in mining stocks.
Prices on Taiwan's stock market continued to fall sharply although losses were checked by a late rally when news spread of surging prices on the Tokyo market.
The Taipei market index plummeted 158.19 points, closing at 3,334.75 points, after dropping 172.99 points Tuesday.
A Taiwanese stock market official attributed some of Wednesday's drop to the fact that losses Tuesday were held in check by a 5 percent limit on declines.
Another market watcher said investors regained some of their confidence late in the session as they saw the upturn in other markets.
In Hong Kong, the stock exchange remained closed yesterday after a record drop on Monday.
However, the colony's financial secretary said that the stock exchange might reopen later in the week.