ECB president: No immediate need to act

BERLIN: Stocks slumped worldwide after terrorists set off four explosions that rocked London's subway and bus system and killed at least 33 people. The British pound hit a fresh 19-month low. 

Markets rebounded from their lows later in the day as European Central Bank president Jean-Claude Trichet said policy makers did not see any immediate need to act and firms such as Aviva Plc, the UK's largest insurer, said the bombings would have little effect on their business. 

Europe's Dow Jones Stoxx 600 Index had the biggest loss since August. The benchmark fell 1.8% to 274.68, at the 4:30pm close in London after dropping as much as 4.2%. The FTSE 100 Index slipped 1.4% and the Dow Jones Industrial Average declined 0.5%. 

Markets' recovery reflected a tendency to overreact to terror attacks, said Abby Joseph Cohen, chief investment strategist at Goldman, Sachs & Co in New York. 

“When markets respond to events like this, the response tends to be very short-lived unless there are broader economic consequences,'' said Cohen.  

Crude oil tumbled from a record US$62.10 in New York amid concern that demand will weaken in the aftermath of the blasts. The contract for August delivery sank as much as 6.7% to US$57.20 a barrel, before recovering to US$60.25. – Agencies  

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