Bernanke says not worried about economy slowdown
Federal Reserve chairman Ben S Bernanke says he is not worried about the stock market plunge on Tuesday or new evidence of slowing economic growth.

Bernanke's soothing comments helped to calm the share market recapture some of the ground lost on Tuesday. Alan Greenspan, former fed chairman had cautioned on Monday that a recession was a possibility.

Bernanke said the Fed was looking for moderate growth in the US economy going forward and it was likely that the US economy would strengthen toward the middle of the year.

Bernanke also remained unaffected by a new report by the US Commerce Department, which sharply lowered growth estimates during the final quarter of 2006 to 2.2 per cent from its earlier estimate of 3.5 per cent mainly due to new changes in estimates of inventory-building activities by companies and roughly in line with predictions by Wall Street analysts.

Bernanke said the downward revision had actually bolstered the Federal Reserve's view that the economy was poised for mildly slower growth as well as a slight decline in inflationary pressures.

The Federal Reserve forecasts the economy to expand by 2.5 to 3 per cent in 2007, down from about 3 percent last year, and for the unemployment rate to remain below 5 percent - a level that many economists say is almost equal to full employment.
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Global markets limp back to recovery
Global equity markets showed signs of stabilising yesterday after Tuesday's sharp sell-off.

Though Asian and European markets opened lower affected by the sudden slide on Wall Street the previous day, the slide was less than expected, and America's Dow Jones industrial average - whose 416-point fall on Tuesday was its worst since the 11 September terror attacks - managed to recover a little ground.

The FTSE 100 closed at 6,171.5, losing a further 114.6 points after its 149-point slide the previous day and taking the total value wiped from the blue-chip index to £64bn.

By the close on Wall Street, bargain-hunting among investors had pushed the Dow back up 52.39 points to 12,268.63.

Dow Jones, which calculates the US industrial average, was the target of accusations that its incompetence worsened Tuesday's panic. Because of the volume of trading, Dow's computers could not keep up with the market and when they finally caught up, the index appeared to plunge almost 200 points all in one go. The sudden drop intensified panic among already jittery traders.

Dow Jones is likely to now face a flurry of lawsuits from investors misled by the computer glitch.

The Shanghai stock market which fell 9 per cent in the early hours of Tuesday, triggering a global stock market slide, gained more than 3 per cent yesterday.

China's state-controlled media calmed down domestic investors, who account for virtually all trading in Shanghai. The Chinese authorities denied rumours of a 20 per cent capital gains tax on stock investments - speculation on which played a role in Tuesday's plunge.
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