European stock markets shot higher and the euro recovered further from four-year low marks against the dollar on Tuesday but market concerns about plans to tackle a mountain of EU debt lingered, traders said.
“A resurgence in US trading after yesterday’s European close has locked in a positive start for the trading session today, with the heavyweight miners, banks and energy firms all making gains to lead indices higher,” said City Index analyst Joshua Raymond.
“However, trading continues to be choppy and this means that there remains a question mark over whether index gains can garner momentum.”
Raymond added: “In truth, the market remains focused on the impact of EU austerity measures on growth.”
London’s benchmark FTSE 100 index rose 0.52 percent in late morning trading. Frankfurt jumped 0.93 percent, Paris advanced 1.02 percent and Madrid surged 1.98 percent.
Earlier in Asia, Tokyo closed flat, Hong Kong jumped 1.17 percent and Shanghai won 1.36 percent after sharp losses on Monday.
Eurozone finance ministers met in Brussels on Monday, battling to defend the euro but with no obvious agreement on tactics to slash spending.
Sentiment remained fragile despite an EU-IMF rescue package worth almost one trillion dollars designed to prevent the Greek crisis from spreading.
Concerns linger that a default would hit the financial system in the same way the collapse of Lehman Brothers did in 2008, while necessary austerity measures could crush European growth.
Credit Suisse strategist Satoru Ogasawara noted the market now tended to react to negative news rather than positive news — and said that the euro could resume its plunge.
“The market simply doesn’t want to buy the euro. Confidence on the euro will not be restored” until the fiscal crisis in Greece and other countries is resolved.
The euro rose to 1.2403 dollars in London on Tuesday, up from 1.2394 dollars late in New York on Monday when it also struck a four-year low of 1.2234.
France’s minister for economic recovery on Tuesday played down worries over the plunging euro and argued that a weaker currency would help boost European exports.
“The fact that the euro today is not as strong is a real advantage for exports,” said Patrick Devedjian in an interview to French radio.
“The euro has gone down, the rates are varying, this is not a tragedy,” he said.
Devedjian noted that a strong euro also had its critics.
“If my memory serves me well, most of the exporters and importers were whining because they found the euro too strong and complained that it penalised them,” said the minister.
His comments appeared to be played out in data published Tuesday.
The 16-nation eurozone’s trade surplus with the rest of the world soared to 4.5 billion euros (5.5 billion dollars) in March, boosted by the weakness of the euro, official figures showed.
The new figure, an initial estimate, almost doubled the 2.4 billion euro trade surplus which the countries sharing the euro totted up in February when the eurozone dragged itself out of deficit.
StockSource.us ABOUT US: Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities. We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.
No comments:
Post a Comment