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Stocks rebound following sell-off

Stock markets in Europe and Asia have shown signs of recovery following yesterday's global-sell off, which was prompted by fears about the health of the US economy and its mortgage market.London's FTSE 100 index was up 1.37 per cent to 6,083.10 in early trading, having lost 2.5 per cent off the value of its shares at the close of the previous day.Germany's Dax 30 index was also up 1.7 per cent following heavy losses and France 's Cac 40 showed signs of a similar rebound, up 1.5 per cent.Meanwhile, Japan 's Nikkei benchmark index recovered just half of its losses from the previous day, climbing 1.1 per cent to end on 16,860.39, having fallen by almost three per cent on Wednesday.The boosts came after US stocks rebounded in late trading yesterday, with the Dow Jones index closing 0.48 per cent up on 12,133.40 and the Nasdaq up 0.9 per cent.US shares lifted after the investment bank, Lehman Brothers Holdings, stressed that its exposure in the US sub-prime mortgage market was minimal with a rise in bad loans unlikely to stem its performance.Global stocks had slumped sharply yesterday after Wall Street was rocked by figures showing a significant rise in default levels for America 's sub-prime mortgage market, which provides home loans to those with poor credit histories.Weaker-than-expected retail sales figures also promoted fears of a downturn in the US economy, the world's largest.But analysts remain cautious about whether the latest global sell-off is over, with markets having previously been hit last month by concerns that the Chinese government could introduce new regulations and a capital gains tax in a bid to slow the country's booming economy."Until we get a resolution to the issues that we are seeing in the US sub-prime market, and see what impact it is going to have on the global economy, we are likely to see a lot of volatility," said Simon Doyle of Australia 's Schroder Investment Management.

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