Overseas Markets Rebound After Fear-Fall Friday

Major world markets rebounded Monday, regaining some of the ground they lost last week in a global plunge set off by worries about banks' exposure to losses in the collapsing U.S. subprime mortgage market.

The European Central Bank, which injected another 47.67 billion euros ($65.3 billion) into the banking system Monday to soothe rattled credit markets, said conditions were "normalizing."

The U.K.'s FTSE 100 Index rose 1.8 percent to 6,147.00 points, France's CAC-40 gained 1 percent to 5,504.86, while Germany's DAX Index advanced 0.8 percent to 7,404.95.

Still, some analysts were cautious. The FTSE-100 lost 3.7 percent on Friday — its biggest percentage drop in four years — and is down around 10 percent since its peak in June.

The Nikkei 225, benchmark for the Tokyo Stock Exchange, edged up 0.2 percent to 16,800.05, recouping some of Friday's drop as investors bought back into stocks with strong earnings. Hong Kong's blue chip Hang Seng Index rose 0.45 percent to 21,891.10. South Korea's benchmark stock index rose 1.1 percent to close at 1,849.26.

There was no firm conviction the volatility of the last few weeks has ended.

"The Hong Kong market is in directionless trade. Aftershocks of U.S. subprime mortgage woes are likely to continue rippling through markets in the Asia-Pacific region," said Peter Lai, director of DBS Vickers Securities Ltd. in Hong Kong.

Yutaka Miura, manager at Shinko Securities in Tokyo, said gains Monday weren't expected to be very big, and most investors were waiting to see where the U.S. markets go later in the day.

"This was mainly a technical rebound from Friday," he said.

The Dow Jones industrials closed out a volatile week Friday on Wall Street, ending with just a 31-point loss for the day and managing to post a gain for the week. On Thursday the Dow had fallen 387 points and extended a series of triple-digit swings that began in late July.

Last week, the U.S., European, Australian and Japanese central banks poured funds into money markets as stocks dropped on concerns over U.S. mortgages. The European Central Bank and the Bank of Japan acted again Monday.

The BOJ injected 600 billion yen ($5 billion) into money markets to try to bring more stability to the markets and the ECB said it added another 47.67 billion euros ($65.3 billion) into the banking system, but added that market conditions are "normalizing."

The ECB had provided 95 billion euros ($130 billion) in funds to banks on Thursday and injected a further 61 billion euros ($83.6 billion) on Friday. On Friday, the Bank of Japan injected 1 trillion yen ($8.39 billion) into money markets to curb rises in a key overnight interest rate.