Markets steady as focus remains on Spain and Greece
Thursday 27 September 2012
Financial markets recovered their poise today, though investors remained concerned that Greece and Spain will struggle to implement debt-reduction strategies in the face of popular outrage.
The mood in markets improved modestly from yesterday, when violent street protests in Greece and Spain over upcoming austerity packages spooked investors.
In Greece, the leaders of the three parties that make up the coalition appear to have agreed to the broad outlines of a spending cuts package that the country must impose to keep receiving vital rescue loans. The meeting took place a day after more than 50,000 anti-austerity protesters took to the streets of Athens.
Greater focus will probably center on Spain, where the government is due to unveil new austerity policies amid mounting concerns over the country's economic future.
Recession-hit Spain has come under pressure to tap a bond-buying program from the European Central Bank that has been partly designed to keep a lid on the country's borrowing costs. But the government has been reluctant to request the help for fear of the conditions attached.
That has unnerved markets, ending the recent weeks' relative calm in markets.
"You have to admire European politicians for their consistent ability to be able to snatch defeat from the jaws of victory," said Gary Jenkins, managing director of Swordfish Research.
Spain's new austerity package, which is due to be unveiled toward the end of the European trading session, comes in the wake of a violent protest in Madrid and big falls in Spanish stocks.
Stocks in Spain recovered some of the previous day's hefty loss. The main IBEX index in Madrid was up 0.3 per cent at 7,834 while the yield on the country's 10-year bonds eased back below 6 per cent.
"While none of Spain's pain has disappeared overnight, patterns in bond and stock markets seem to be pointing to less concern than earlier," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.
Elsewhere, Europe's main markets also pushed higher but the gains were dwarfed by Wednesday's losses.
The FTSE 100 index of leading British shares was up 0.2 per cent at 5,778 while Germany's DAX rose 0.2 per cent to 7,293. The CAC-40 in France was 0.6 per cent higher at 3,436.
In the US, investors brushed aside figures showing a downward revision to second quarter economic growth and focused on the fact that weekly jobless claims fell to their lowest level in two months. The Dow Jones industrial average was up 0.4 per cent at 13,465 while the broader S&P 500 index rose the same rate to 1,439.
The steadier tone was evident in other financial markets, too. The euro was flat at $.1.2860 while the benchmark New York oil price rose $1.03 to $91.01 a barrel.
The market gains started earlier, in Asia, helped by expectations the People's Bank of China will soon take more steps to ease a slowdown in the world's No. 2 economy.
Hong Kong's Hang Seng climbed more than 1.1 percent to 20,762.29 and mainland China's Shanghai Composite Index jumped 2.6 percent to 2,056.32. The smaller Shenzhen Composite Index also gained 2.6 percent to 837.96.
Japan's Nikkei 225 rose about 0.5 percent to 8,949.87, a day before the release of industrial production and retail sales figures.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 Doctors remove 80 teeth from boy's jaw
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
- 5 Naomi Wolf reacts to Isis 'conspiracy theories' critism after she questions whether beheading videos are real
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing
Syrian teenager Usaid Barho reveals how he escaped from Isis using a suicide vest
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Douglas Carswell tells Ukip to stop blaming foreigners as youth poll shows Nigel Farage is even less popular than Nick Clegg
£35000 - £45000 per annum: Recruitment Genius: A well funded smart home compan...
£35000 - £45000 per annum: Recruitment Genius: *Flexible working in a relaxed ...
£20000 - £25000 per annum: Recruitment Genius: This accountancy firm have an e...
£17000 - £28000 per annum: Recruitment Genius: Junior Mobile Application Devel...