Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

GLOBAL MARKETS-Greek vote optimism lifts stocks, euro

Published 06/27/2011, 01:30 PM
Updated 06/27/2011, 01:36 PM

* Euro bounces higher in volatile session

* French banks agree to roll over Greek debt holdings

* U.S. bank shares up after global capital rules announced (Updates prices)

By Rodrigo Campos

NEW YORK, June 27 (Reuters) - Global stocks rose on Monday and the euro bounced back against the dollar on increasing confidence the Greek parliament will pass an unpopular austerity plan and as French banks outlined an agreement to roll over Greek debt.

Bank shares were among top gainers in U.S. markets, which rebounded following three days of losses, after regulators announced global capital rules that were not as harsh as previously feared. For details see [ID:nN1E75Q0N3].

In Europe, however, bank shares slipped even as equity markets eked out gains.

Greek lawmakers were to begin debating on Monday evening a 28 billion euro ($40 billion) package of measures to increase taxes and cut fiscal spending that is critical to winning a new round of international funding to keep the country afloat. For details see [ID:nLDE75P0BM].

"As long as the Greek Parliament votes 'yes' this week on an austerity plan, stocks are going to go up," said Cary Leahey, economist and managing director at Decision Economics in New York.

French banks, among the most exposed to the Greek debt crisis, have reached an outline agreement to roll over holdings of maturing Greek bonds. French President Nicolas Sarkozy confirmed the breakthrough on Monday and German bankers voiced their interest in the "French model." [ID:nL6E7HR0GU]

The Dow Jones industrial average <.DJI> was up 108.45 points, or 0.91 percent, at 12,043.03. The S&P 500 <.SPX> was up 10.49 points, or 0.83 percent, at 1,278.94. The Nasdaq Composite <.IXIC> was up 32.63 points, or 1.23 percent, at 2,685.52.

Financials, which have been pressured by the ongoing euro-zone sovereign debt crisis, were among the day's biggest gainers. The S&P financial index <.GSPF> was up 1.1 percent, and an index of large U.S. bank stocks <.BKX> rose 1.3 percent.

On Saturday, global banking regulators in Basel agreed that the biggest banks globally will need to boost their ratios of common equity to risk-weighted assets by up to 2.5 percentage points, less than the 3 percentage points some investors had feared. For details, see [ID:nLDE75O053]

Global stocks as measured by MSCI <.MIWD00000PUS> were up 0.3 percent for the day.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed up 0.05 percent at 1,074.67 points after hitting their lowest level since mid-March on Friday.

Treasury prices fell as the news from Europe eased worries over a Greek default, reducing safe-haven demand for U.S. government debt.

Benchmark 10-year U.S. Treasury notes were off 3/32 in price to yield 2.88 percent, up from Friday's 2.87 percent.

EURO UP, OIL WEAK

The euro rallied against the U.S. dollar as investors became optimistic the austerity vote will pass in Greece's parliament and the euro zone member can avoid a default on its debt.

The euro had been swinging between gains and losses throughout the global session responding to each headline or market rumor on the Greek vote, traders said.

"I think the vote will pass or we would be seeing a huge sell off," said Kathy Lien, director of currency research at GFT Forex in New York. "The fate of the euro/dollar hinges on the outcome of the vote."

The single currency was last at $1.4271, up 0.6 percent on the day, and now well off the session low of $1.4101, according to Reuters data.

U.S. crude oil futures continued to slide in the aftermath of the International Energy Agency's surprise release of 60 million barrels of oil to rein in prices. Brent futures were last up in a volatile session, supported by weakness in the U.S. currency.

Brent crude futures were 71 cents higher at $105.83 a barrel by 1721 GMT, with the session low at $102.28. U.S. light crude futures fell 65 cents to $90.51 a barrel, after touching lows of $89.61 earlier. (Reporting by Rodrigo Campos; Additional reporting by Edward Krudy, Nick Olivari and Ellen Freilich; Editing by Leslie Adler)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.