World stocks, euro, oil jump as EU summit delivers

World stock markets surged Friday, the euro jumped against the dollar, and oil prices rocketed after a key EU summit delivered surprise emergency measures to fight the eurozone debt crisis.

The Madrid and Rome markets were the biggest gainers -- and Italy's and Spain's government bond yields also fell sharply -- after emergency aid for both was announced following marathon talks in Brussels to rescue the eurozone.

But gains were strong all around: in New York, the Dow jumped 2.2 percent and the Nasdaq rose 3.0 percent on newfound confidence in the embattled single currency area.

"It was all about Europe once again, but the news was actually good this time," said Joe Bell of Schaeffer's Investment Research.

"Euro-zone leaders came to agreement on several key issues that investors hope will improve financial conditions in the region."

In Europe, the markets were equally ebullient. Frankfurt's DAX 30 rose 4.3 percent and Paris' CAC 40 soared 4.8 percent. Milan rocketed up by 6.6 percent, Madrid by 5.7 percent and Athens also by 5.7 percent.

Among individual shares, Spanish bank BBVA soared 9.0 percent, French lender BNP Paribas rallied 9.7 percent and Deutsche Bank won 5.91 percent.

Only London was drab; the benchmark FTSE 100 ended the day adding just 1.4 percent tempered by a series of banking scandals.

Earlier Asia stock markets gained between one and two percent helped by the eurozone summit news.

In the late night deal, the eurozone leaders agreed to use emergency funds to support ailing banks directly and to ease pressure on governments' debt burdens.

They also agreed to inject 120 billion euros ($150 billion) of stimulus money into the suffering euro area economy.

EU president Herman Van Rompuy hailed the deal as a "real breakthrough" that would calm financial markets and reshape the eurozone to prevent a recurrence of the debt crisis.

"The key breakthrough at the euro area summit was to pave the way for a banking union that would ultimately be back-stopped by euro area collective funds, helping to break the link between sovereigns and national banking systems," said Julian Callow of Barclays Research.

"The summit's conclusions are another reminder that the complex economic, financial, fiscal and political challenges can be addressed only incrementally, with full attention to conditionality, accountability and sequencing."

The impact spilled through other markets. Gold gained 3.1 percent to just under $1,600 an ounce. Oil prices rocketed: New York's West Texas Intermediate contract soared $7.27 to $84.96 a barrel, while in London, Brent surged $6.44 to $97.80.

The euro shot up more than two cents against the dollar Friday after the summit; at 2100 GMT, it was trading at $1.2654, up from $1.2442 late Thursday. The safe-haven yen sagged, falling to 101.02 per euro and 79.83 per dollar.

"The low expectations in place the past few days surrounding the eurozone summit were tossed aside with ease on Friday, as new measures proposed prompted a massive short-covering rally in the euro," said Christopher Vecchio of Daily FX.

Doubts over the execution of the measures agreed at the summit remained, and traders said markets would return their focus to that in the coming weeks.

"It needs to be seen however if these developments and measures are indeed enough to calm markets long-term, with periphery bond yields establishing a firm downward trend, or if relief is only temporary." said ETX Capital trader Markus Huber.

Justin Harper, market strategist for IG Markets Singapore, called the oil price surge a short term rally.

"It could fizzle out because people have seen that there's still a lot of infighting between all the different member states," he said.

"They're attacking the short-term issues... there's still a lot of issues to be resolved."

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Lupita Nyong'o's $150,000 Oscars dress stolen from hotel
    Lupita Nyong'o's $150,000 Oscars dress stolen from hotel

    The $150,000 pearl-studded, custom-made Calvin Klein dress worn by Oscar-winning actress Lupita Nyong'o at this year's Academy Awards has been stolen, police said on Thursday. The gown, embellished with 6,000 natural white pearls, was stolen from Nyong'o's room at the London Hotel in West Hollywood, during the day on Wednesday, a spokesman for the Los Angeles County Sheriff's Department in West Hollywood said. "Ms Nyong'o was not in the room at the time of the theft," Deputy John Mitchell …

  • South Korea decriminalises adultery, condom shares soar
    South Korea decriminalises adultery, condom shares soar

    South Korea's Constitutional Court on Thursday struck down a controversial adultery law which for more than 60 years had criminalised extra-marital sex and jailed violators for up to two years. The decision saw shares in the South Korean firm Unidus Corp., one of the world's largest condom manufacturers, soar by the daily limit of 15 percent on the local stock exchange. "Even if adultery should be condemned as immoral, state power should not intervene in individuals' private lives," said …

  • US-led strikes on IS after group seizes 220 Christians
    US-led strikes on IS after group seizes 220 Christians

    The US-led coalition has carried out air strikes against the Islamic State group in northeastern Syria, where the jihadists have launched a new offensive and kidnapped 220 Assyrian Christians. The raids on Thursday struck areas around the town of Tal Tamr in Hasakeh province, the Syrian Observatory for Human Rights said, without giving information on possible casualties. The town remains under the control of Kurdish forces, but at least 10 surrounding villages have been seized by IS, along …

  • U.S. flies most advanced surveillance plane from Philippines

    By Manuel Mogato MANILA (Reuters) - The United States has begun flying its most advanced surveillance aircraft, the P-8A Poseidon, out of the Philippines for patrols over the South China Sea, the U.S. Navy said on Thursday, acknowledging the flights for the first time. The United States, the Philippines' oldest and closest ally, has promised to share "real time" information on what is happening in Philippine waters as China steps up its activities in the South China Sea. China claims most of …

  • Militants abduct more Christians, smash ancient artifacts
    Militants abduct more Christians, smash ancient artifacts

    BEIRUT (AP) — Islamic State militants seized more Christians from their homes in northeastern Syria in the past three days, bringing the total number abducted by the extremist group to over 220, activists said Thursday. …

  • National Geographic 'Afghan girl' in Pakistan papers probe
    National Geographic 'Afghan girl' in Pakistan papers probe

    Pakistani officials are investigating after the famous green-eyed "Afghan girl" immortalised in a 1985 National Geographic magazine cover was found living in the country on fraudulent identity papers. The haunting image of the then 12-year-old Sharbat Gula, taken in a refugee camp by photographer Steve McCurry, became the most famous cover image in the magazine's history. Now Pakistani officials say that Gula applied for a Pakistani identity card in the northwestern city of Peshawar in April …

  • IS executioner 'Jihadi John' named as London graduate
    IS executioner 'Jihadi John' named as London graduate

    "Jihadi John", the masked Islamic State group militant believed responsible for beheading of at least five Western hostages, has been named as Kuwaiti-born computing graduate Mohammed Emwazi from London. "Jihadi John", nicknamed after Beatle John Lennon due to his British accent, is believed to be responsible for the murders of US journalists James Foley and Steven Sotloff, British aid workers David Haines and Alan Henning and American aid worker Abdul-Rahman Kassig. …

  • ‘Noy angered by previous SAF failures to get Marwan’
    ‘Noy angered by previous SAF failures to get Marwan’

    Supt. Raymund Train, who led the SAF team that killed Marwan in Mamasapano, Maguindanao on Jan. 25, recounted in a sworn statement the meeting he and senior SAF officers had with Aquino in Malacañang on Nov. 30. Train said among the senior officers who attended the meeting were then PNP chief Director General Alan Purisima, SAF chief Director Getulio Napeñas, SAF deputy commander Chief Supt. Noli Taliño and intelligence group chief Senior Supt. Fernando Mendez. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options