Global shares, euro jump on Spanish bank bailout

Tuesday, 12 June 2012 00:00 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): Shares and the euro rose and safe-haven debt fell on Monday after a bailout of up to 100 billion euros ($125 billion)for Spain’s banking sector eased some concern about its ability to survive the euro zone debt crisis.

The relief from the weekend deal between euro zone finance ministers may be short-lived, however, as investors turn their focus to Greek elections on Sunday that could put Athens on a path to leaving the currency bloc.

That would then renew the market pressure on Spain and Italy, which is also facing scrutiny of its public finances.

The single currency hit a near three-week high, up nearly 1 percent to 1.2630 by 0705 GMT, while euro zone blue-chip stocks rose 2.4 percent at the open. Spanish stocks, meanwhile, were up 5.8 percent.

“In terms of fundamentals, this is clearly an important step as the money now seems to be on the table to heal the Spanish banking sector. When the bad loans can gradually be taken off, the balance sheet and the sector can start to function in a normal way,” Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said.

“However, this does not mean we have clear sailing from here. In order to get out of this situation, we need structural supply side reforms and some growth.”

With risk assets getting a boost across the board in early European trade, safe haven German government Bund futures were clipped 0.5 percent.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.