Black Friday Sale! Save huge on InvestingProGet up to 60% off

GLOBAL MARKETS-Euro up ahead of EU summit, Greek rescue eyed

Published 02/11/2010, 01:45 AM
HG
-

* Greece in spotlight as EU leaders meet in Brussels

* European stock index futures signal stronger open

* Asian stocks advance on strong regional data

* Aussie dollar rallies, shares up after upbeat jobs report

* China consumer inflation slows, lending strong

By Anshuman Daga

SINGAPORE, Feb 11 (Reuters) - The euro rose on Thursday ahead of a key EU summit that could lay the groundwork for a rescue of debt-stricken Greece, while Asian stocks gained for a third day, powered by strong economic data from Australia and China.

European Union leaders are expected to reach a political agreement at the summit to help Greece, with the financial details to be hammered out at finance ministers' meeting in Brussels on Monday, a senior EU source told Reuters.

But any emergency aid is likely to require a big commitment from Athens on getting its economy in order, and may do little to ease investors' long-term concerns about fiscal tensions in the euro zone and whether they will hurt the global economic recovery.

Greece's ballooning deficit and debt have reverberated across financial markets in recent months, hitting the euro regional banking stocks and some government bonds, and prompting many investors to pull back from riskier assets worldwide.

Financial spreadbetters expected Britain's FTSE 100, Germany's DAX and France's CAC 40 to open 0.4 to 0.6 percent higher, building on Asian gains, while investors awaited news from the EU meeting. U.S. stock futures also rose 0.4 percent.

"It seems all markets are focused on events in the euro zone and 'will they' or 'won't they' commit bags of cash to a bailout in some manner," said David Watt, senior currency strategist at RBC Capital.

The euro edged up 0.37 percent to $1.3783, a day after it shed 0.4 percent on concerns about the fiscal problems facing euro zone countries such as Greece, Portugal and Spain. It hit a 8-1/2-month low of around $1.3585 last week on trading platform EBS.

Asian shares shrugged off euro zone jitters and sluggish U.S. markets, buoyed by data showing a surge in employment in Australia and stronger-than-expected bank lending in China in January.

The MSCI index of Asian stocks traded outside Japan advanced 1.6 percent, with the metals and energy sector leading the way. Japan was closed for a national holiday.

The index has lost more than 8 percent so far this year after surging nearly 70 percent in 2009, far outpacing gains of just 20 percent in U.S. and European countries.

Asian corporate earnings have mostly met market estimates this year due to strong regional economic growth, with equity analysts recently upgrading estimates for metals and mining industries and the technology sector. Australian shares rose 0.9 percent to their highest close in one week and the Australian dollar jumped three-quarters of a cent after data showed employment surged past all forecasts for a fifth straight month in January.

The jobless rate also dove to an 11-month low, reigniting talk interest rates would have to go up again as early as March.

In China, whose markets have been pressured by worries about an official clampdown on excessive credit, data showed banks lent 1.39 trillion yuan of loans in January, more than the 1.35 trillion yuan economists had forecast.

Other data showed consumer inflation moderated more than expected in the year to January, though producer price inflation accelerated.

"A big part of the risk perception that motivated the sell-down of Chinese stocks was concerns about an inflation breakout and possibly that China would have to dramatically tighten monetary policy in response," said Michael Kurtz, head of Asian equity strategy at Macquarie in Shanghai.

"This number goes a long way in reducing those worries," Kurtz said, referring to the consumer inflation data.

Beijing's moves to staunch excessive credit and keep the economy from overheating have pushed Shanghai and Hong Kong indexes down more than 10 percent from November and weighed on stocks in the rest of Asia and globally.

But Shanghai shares rose 0.2 percent after the latest data, while Hong Kong's Hang Seng index gained 1.1 percent.

South Korea's central bank signalled interest rates would stay at a record low for much of the first half, citing uncertainties over the economic outlook and European sovereign debt problems.

Wall Street edged lower and U.S. Treasuries fell on Wednesday after Federal Reserve Chairman Ben Bernanke gave his most detailed comments to date on how the U.S central bank will begin to wean the economy off its extraordinary monetary stimulus.

U.S. oil futures climbed toward $75 a barrel, adding to the previous session's gains on an upbeat oil demand growth forecast from the U.S. Energy Information Administration.

Three-month copper on the London Metal Exchange rose more than 3 percent, pulling up Shanghai metal 1.5 percent, after a modest fall in the previous session. (Additional reporting by Anirban Nag in SYDNEY)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.