Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

Netanyahu deletes tweet featuring photo of James Foley

Read more

THE WORLD THIS WEEK

The World This Week - 22 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 22 August 2014

Read more

FRANCE IN FOCUS

FRANCE IN FOCUS

Read more

FOCUS

Lifting the veil over China's air pollution

Read more

ENCORE!

Tango Takeover in Paris

Read more

WEB NEWS

Calls for ISIS media blackout after execution of James Foley

Read more

IN THE PAPERS

'Steely resolve of reporters exploited by pared-down employers'

Read more

BUSINESS DAILY

US judge calls Argentina bond swap offer illegal

Read more

  • Europe launches navigation satellites to rival GPS

    Read more

  • Besieged by problems, Hollande faces unhappy return from summer holidays

    Read more

  • Iraqi Sunnis quit govt talks after mosque massacre

    Read more

  • US demands Russia withdraw aid convoy from Ukraine

    Read more

  • PSG fall flat once more against Evian

    Read more

  • Fed Chair says US job market still hampered by Great Recession

    Read more

  • August 22, 1914: The bloodiest day in French military history

    Read more

  • Central African Republic announces coalition cabinet

    Read more

  • Hamas publicly executes "informers"

    Read more

  • French firebrand leftist to quit party presidency, but not politics

    Read more

  • Fear of Ebola sky-high among Air France workers

    Read more

  • US says Islamic State threat 'beyond anything we've seen'

    Read more

  • Malaysia mourns as remains of MH17 victims arrive home

    Read more

  • Turkish Foreign Minister Davutoglu set to be Erdogan's new PM

    Read more

  • Interactive: Relive the Liberation of Paris in WWII

    Read more

Europe

Stocks soar following Spain bank bailout

Video by Catherine VIETTE

Text by News Wires

Latest update : 2012-06-11

European and Asian markets got a boost on Monday as investors sighed a breath of relief after eurozone finance ministers offered a €100 billion rescue package to Spain’s struggling banking sector.

AFP - European stock markets and the euro soared on Monday as investors welcomed news that the eurozone has agreed to lend Spain up to 100 billion euros ($125 billion) to save its troubled banking sector.

In morning deals, London's FTSE 100 index jumped 1.53 percent to 5,518.09 points, Frankfurt's DAX 30 advanced 1.92 percent to 6,249.57 points and in Paris the CAC 40 gained 2.0 percent to 3,113.24 points.

Madrid's IBEX 35 soared by almost 6.0 percent, before easing back to 6,847.4 points, up 4.50 percent.

Asia also rebounded sharply, with Tokyo 1.96 percent and Hong Kong 2.44 percent higher.

The euro rallied to $1.2671, as investors flocked back into the single currency on relief over the deal. It later stood at $1.2612, up from $1.2514 late Friday.

Brent crude oil prices meanwhile advanced back above the key level of $100 per barrel on hopes of improving energy demand.

"Spain's 100-billion-euro deal has certainly pleased the markets, with Asian equities rising strongly and European equity markets up," said Rebecca O'Keeffe, head of investment at online brokerage Interactive Investor.

"Europe's bond markets have reacted positively with periphery countries all benefitting and tightening versus core countries, while the euro is back above $1.26. Consensus from all markets is overwhelmingly positive."

Eurozone finance ministers on Saturday threw Spain a lifeline to save its stricken banks amid efforts to avert a broader financial catastrophe.

Spanish Economy Minister Luis de Guindos insisted the handout was not a rescue but a loan that imposes conditions on the banks. However, it marked a dramatic climbdown for Madrid, which had denied it needed any outside aid.

The nation's borrowing costs fell on Monday, but remained at levels widely regarded as unsustainable over the longer term.

Spanish 10-year government bonds yields tumbled to a low of 6.017 percent from the previous close of 6.08 percent.

"Spain's request for financial support from the European authorities to recapitalise its domestic banking sector is an explicit acknowledgement that it is unable to obtain the funds from the market without borrowing at unsustainable market rates," said analyst Lee Hardman at The Bank of Tokyo Mitsubishi UFJ.

The deal was meanwhile hailed by Germany, France, Japan, China and the United States as well as the International Monetary Fund (IMF).

But traders said the euro's gains were unlikely to last as the Spain deal was not a comprehensive solution to wider regional problems, especially given rising uncertainty ahead of Greek elections on June 17.

Investor concerns have weighed on the euro with tensions high over fears Athens may exit the bloc following the polls. The unit has tumbled to multi-year lows against the dollar and yen in recent weeks.

Date created : 2012-06-11

  • SPAIN - BANKING

    Spanish premier hails €100 billion eurozone lifeline

    Read more

  • SPAIN - BANKING

    Spain requests eurozone bailout for struggling banks

    Read more

  • SPAIN - BANKING

    Bankia shares drop after record bailout plea

    Read more

COMMENT(S)