LONDON (AP) – World markets rose Friday amid stock buying from pension funds balancing their portfolios at the month’s end and a general sense that share prices may have hit a bottom. Asian shares had earlier closed mostly lower.

Britain’s FTSE 100 index was 85.69 points, or 2.0 percent, higher at 4,377.34 despite a 19 percent plunge in the share price of telecommunications company BT PLC after it issued a profits warning.

Meanwhile, the CAC-40 in France was 79.25 points, or 2.3 percent, higher at 3,487.07. Germany’s DAX saw the biggest gains, having underperformed the other indexes all week. It was 118.67 points, or 2.4 percent, higher at 4,987.97.

Concerns about the global economy were stoked further Friday after the Commerce Department said U.S. personal spending fell by 0.3 percent last month, the biggest decline since June 2004. Combined with flat readings in both July and August, it led to the worst quarterly performance in 28 years.

And the Chicago Purchasing Managers Index, a measure of manufacturing activity, fell to a reading of 37.8 – much worse than the 48.0 figure that analysts anticipated. But the University of Michigan’s consumer sentiment data came in at 57.6, slightly better than the 57.5 expected.

However, Wall Street’s reaction to the data was minimal given the downturn had already been priced when it was revealed Thursday that the U.S. economy contracted by 0.3 percent in the third quarter of the year.

Trading is complicated Friday by the fact that it is the end of the month and many investors, particularly pension funds, are looking to rebalance their holdings among stock sectors and other investments such as bonds to fit their investment approach, after what has been one of the most volatile trading periods in modern times.

Despite the month-end technicalities, there is a general feeling that the wild swings in stock markets seen in recent weeks may have to an end, for now at least.

“We have certainly had to endure quite a high degree of volatility this week but on balance equity markets look as though they want to form a base,” said Neil Mackinnon, chief economist at ECU Group.

However, it may yet be too early to say that volatility and downtrend is over.

“Investor confidence is still cautions and it is difficult to say the bear market is entirely over,” said Mackinnon.

One reason stock markets have steadied somewhat this week is that central banks are cutting interest rates swiftly.

Most notably the U.S. Federal Reserve reduced its benchmark Fed funds rate by a half percentage point to 1.00 percent and the Bank of Japan lowered its main rate by 0.20 percentage points to 0.30 percent, its first cut in seven years.

The Bank’s rate cut did little for Japanese shares though. The Nikkei index sank 5 percent to 8,576.98 amid persistent worries about earnings.

Hong Kong’s Hang Seng slid 2.5 percent to 13,968.67 after vaulting 12.8 percent Thursday. Smaller Asian markets such as the Philippines and Taiwan both rose 4 percent or more, while Jakarta’s main index shot up 7 percent.

However, South Korea’s market extended the previous session’s 12 percent rally with the Korea Composite Stock Price Index gaining 2.6 percent to 1,113.06. Australia’s key index climbed out of negative territory to close 0.4 percent higher.

Oil prices were down $1.65 to $64.31 a barrel.

The dollar fell 0.6 percent to 98.02 yen, while the euro dropped 1.6 percent to $1.2732.


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