World Markets Regain Stability, Post Gains

Stability began to return to the world’s stock markets today as overseas investors regained the optimism devastated by record plunges on Wall Street.

Seesawing share prices gained on the London Stock Exchange as fresh buyers appeared in the market and Wall Street opened strongly.

The Financial Times-Stock Exchange 100-share index closed 142.4 points higher at 1,943.8. The index soared at the opening and hit a high at about 11 a.m. when it was up 181.5 points at 1,983.1.

Earlier, Tokyo Stock Exchange prices soared by record amounts. The 225-share Nikkei stock average rocketed 2,037.32 points--its largest one-day advance ever--to close at 23,947.40.

Both exchanges suffered record plunges in previous sessions, with the London index tumbling 250.7 points on Tuesday and 249.6 points on Monday and the Nikkei falling 3,836.48 points Tuesday.

Traders responded today to the same impetus that moved them earlier in the week: the direction taken by Wall Street.

Following a more than 100-point drop in the Dow Jones industrial average last Friday, overseas traders sold heavily on Monday.

And after the U.S. stock market plunged Monday--with the Dow average tumbling 508 points to 1,738.42, a loss of 22.4% of its value--a selling panic gripped the foreign exchanges Tuesday.

But with Tuesday’s improvement in New York, optimism returned to the foreign markets today. Traders in Tokyo said buy orders swelled against the backdrop of the Wall Street revival, stability in the foreign exchange markets and a scaling back Tuesday of the prime rate by two major U.S. banks that had raised it only last week.

Today’s foreign trading was expected to have a healing effect on U.S. stock activity, which was affected by a spill back from the losses overseas.

On other foreign markets today, prices recovered in Australia but continued to fall in Taiwan.

Most stocks rose in Sydney, where the all-ordinary shares index, the broadest market indicator, was up 1.2% following a massive 24.9% 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.