Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Gaza: A Truce At All Costs?

Read more

AFRICA NEWS

Central African Republic: Brazzaville ceasefire talks deliver fragile deal

Read more

FOCUS

Sluggish tourist season in Crimea

Read more

ENCORE!

Bartabas : Mixing Christ with Spanish music and dancing horses

Read more

IN THE PAPERS

Shifts in the propaganda war waged between Israelis and Palestinians

Read more

IN THE PAPERS

French MPs face quandary in pro-Palestinian rallies

Read more

THE INTERVIEW

Yezid Sayigh, Senior Associate at the Carnegie Middle East Center in Beirut

Read more

#TECH 24

Mind the Gender Gap : getting more women into the tech sector

Read more

INSIDE THE AMERICAS

Bolivian children: heading to work aged 10

Read more

  • Wreckage of Algeria plane found in Mali

    Read more

  • Air Algérie crash: 'We should eliminate the missile hypothesis'

    Read more

  • BNP to pay $80 million for defrauding US Dept of Agriculture

    Read more

  • Protest turns deadly as Palestinians rally against Gaza offensive

    Read more

  • Pope meets with Sudanese Christian woman sentenced to death for apostasy

    Read more

  • Deadly strike on UN shelter in Gaza Strip

    Read more

  • Italy’s Nibali cruises to easy victory in 18th stage of Tour de France

    Read more

  • Iraqi parliament elects moderate Kurd as president

    Read more

  • US, European aviation agencies lift travel restrictions to Tel Aviv

    Read more

  • No end to fighting until Israel ends Gaza blockade, Hamas says

    Read more

  • Two foreign women shot dead in western Afghanistan

    Read more

  • At least 60 killed in attack on prison convoy near Baghdad

    Read more

  • Cycling is ‘winning the war on doping,’ says expert

    Read more

  • Ceasefire agreed for Central African Republic

    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)