European equities rebound from recent losses

European stock markets rebounded Wednesday from recent losses as investors snapped up cheaper shares and shrugged off US debt worries.

London equities gained 0.9 percent near midday, while Frankfurt won 1.1 percent and Paris jumped 1.2 percent in early afternoon eurozone deals.

London shares were buoyed partly by a weak British pound, which hit a January-low at $1.35 on fears of stagflation, or a vicious mix of high inflation and low economic growth.

The euro struck a ten-month low at $1.1657 on the prospect of tighter US monetary policy.

Oil prices dipped one day after Brent had surged close to a three-year peak above $80 on tight global supplies.

“European stock prices have become cheaper, given the sell off we have seen during the past few days, and this has brought some bargain hunters into the markets,” AvaTrade analyst Naeem Aslam told AFP.

Europe’s bourses had stumbled earlier this week on high oil prices, political impasse in Germany and US debt concerns. Wednesday’s rebound was also driven by hopes of a deal to avert a potentially catastrophic US debt default, according to Swissquote analyst Ipek Ozkardeskaya.

“The rebound we see is a correction of the latest sell off, and is certainly fuelled by the expectation (of) an eventual deal on the US debt ceiling,” she added. However, Asian markets mostly fell Wednesday following a rout on Wall Street as investors fret over surging inflation.