Stocks and the euro surged yesterday Monday May 10 after Europe and the International Monetary Fund agreed a 750 billion euro plan for Greece and its eurozone neighbours to stem a crisis that has threatened the global recovery.
Following the announcement the US Federal Reserve and central banks in Japan, Europe, Britain, Canada and Switzerland said they would intervene to ensure that dollar shortages did not occur in European markets.
The single currency shot higher to US$1.3033 in London, up from US$1.2755 in New York Friday. The euro fell to a 14-month low against the greenback last week.
“There’s a sense of security in the currency market for now with concern of Greek debt contagion spreading elsewhere in Europe receding,” Jun Kato, senior manager of investment at Shinkin Asset Management, told Dow Jones Newswires.
But he warned that “any negative news about the debt problems may easily push the euro down.”
Asian stock markets shot higher.
TOKYO: Nikkei jumped 1.60 percent, or 166.11 points, to close at 1,0530.70 and Sydney ended 2.66 percent, or 119.10 points, higher at 4,599.8, its biggest one day gain in more than five months.
Markets last week saw a sell-off amid uncertainty over whether Greece could implement deeply unpopular austerity measures and stave off bankruptcy.
However, “given the package, default risks for Spain and Portugal have eased”, said Satoru Ogasawara, a forex strategist at Credit Suisse in Tokyo.
HONG KONG: Shares jumped 2.54 percent yesterday as dealers welcomed an agreement worth almost a trillion US dollars aimed at avoiding a financial crisis in the eurozone.
The benchmark Hang Seng Index was 506.35 points higher at 20,426.64.
Analysts said the market could extend gains in the coming sessions after diving 5.6 percent last week.
SINGAPORE: Stocks yesterday follow the bullish trend on regional markets which rallied after news of a plan put together by the European Union and the International Monetary Fund to prevent a sovereign debt crisis from spreading.
The benchmark Straits Times Index closed up 2.10 percent, or 59.37 points, at 2,880.48.
Banking shares reversed recent losses.
KUALA LAMPUR: Share prices on Bursa Malaysia extended their consolidations yesterday. Overall advancing counters overwhelmed declining counters by 529 to 194.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index rebounded from its intra-day low of 1,330.96 to its intra-day high of 1,337.20 yesterday. It closed at 1,333.97 points, giving a day-on-day gain of 1.08 points, or 0.08 percent.
In other markets:
SEOUL closed 1.83 percent, or 30.13 points, higher at 1,677.63.
JAKARTA gained 4.06 percent, or 111.09 points to end at 2,850.43.
TAIPEI rose 1.29 percent, or 97.63 points, to 7,664.73.
BANGKOK rose 1.37 percent, or 10.51 points, to close at 779.06.
MUMBAI rose 3.35 percent or 561.44 points to 17,330.55.
MANILA stock market was closed for the national elections yesterday.
VIETNAM: The VN Index dropped 7.65 points or 1.41 percent to 534.38 points with the total matching order trade of 76.28 million shares for 2.581 trillion dong.
The northern bourse also witnessed an other fall when the HNX Index tumbled 2.68 points or 1.45 percent to end at 181.7 points with the total market trade of 62.79 million shares worth 1.178 trillion dong.
EUROPE: European stock markets closed sharply higher yesterday, boosted by news of a trillion-dollar rescue deal agreed by the European Union and International Monetary Fund to ease the eurozone debt crisis.
In London, the benchmark FTSE 100 index jumped 5.16 percent; in Paris, the CAC 40 soared 9.66 percent; and in Frankfurt the DAX gained 5.30 percent.
Elsewhere, Milan was up 11.28 percent, Madrid 14.43 percent and Lisbon 10.73 percent, all record daily gains.
Meanwhile in Greece, the epicentre for the debt and budget crisis which has brought the eurozone to its knees, stocks raced to gains of 9.13 percent.
“Equity markets certainly started the week with a flourish, although after an abysmal end to last week and the release of news regarding a robust bailout package … it’s hardly a surprise that the major indices have all posted sizeable gains,” said Anthony Grech, head of research at traders IG Index.
AMERICA: Stocks rocketed to their biggest gain in a year and bond prices fell Monday after a nearly $1 trillion plan to contain Europe’s debt crisis reassured investors.
The Dow rose 404.71, or 3.9 percent, to 10,785.14. At its peak, the Dow was up nearly 455 points. The climb came after four straight days of losses and was the biggest advance since March 2009, when the market was bouncing off its lowest levels in 12 years.
Even with its gain, the Dow is still below where it closed Wednesday last week. It is also down 420 points, or 3.8 percent, from its 2010 closing high of 11,205 on April 26.
The Standard & Poor’s 500 index rose 48.85, or 4.4 percent, to 1,159.73. Like the Dow, it was the best day for the S&P 500 index since March 23, 2009.
The Nasdaq composite index rose 109.03, or 4.8 percent, to 2,374.67.
As investors jump back into riskier assets like stocks on Monday, U.S. bond prices tumbled. The price of the 10-year note fell by about a point, or $1 per $100.
Gold also fell, losing $9.60 to $1,200.80 an ounce. Treasurys and gold surged late last week as investors piled into safe assets.
Crude oil rose $1.69 to $76.80 per barrel on the New York Mercantile Exchange.
Bank of America rose $1.12, or 6.9 percent, to $17.30, while Caterpillar rose $4.59, or 7.4 percent, to $66.69. GE rose $1.16, or 6.9 percent, to $18.04.
At the New York Stock Exchange, nearly 3,000 shares rose while only about 150 fell. Consolidated trading volume came to 7 billion shares compared with 9.5 billion Friday.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7806 9.9348 0.0838 11.546 7.012 7.599 7.0056 AUD 1.1106 1.4181 0.012 1.6481 1.0009 1.0847 0.1427 CAD 1.0239 1.3074 0.011 1.5194 0.9228 0.9219 0.1316 CHF 1.1096 1.4168 0.012 1.6466 1.0837 0.9991 0.1426 GBP 0.6739 0.8605 0.0073 0.6073 0.6581 0.6068 0.0866 JPY 92.831 118.533 137.756 83.6617 90.6641 83.585 11.9311 EUR 0.7832 0.0084 1.1622 0.7058 0.7649 0.7052 0.1007 USD 1.2769 0.0108 1.484 0.9012 0.9767 0.9004 0.1285 Bloomberg