|
BRUSSELS – A European agreement to bail out Spain's banks sent stock marketssurging Monday, but analysts warned that the deal doesn't solve allof the continent's problems, and the goodwill could be short-lived. Finance ministers from the 17 countries that use the euro said theywere willing to lend Spain up to 100 billion ($125 billion) afterMadrid said it would need help to shore up banks felled by bad realestate loans. Spain has not said exactly how much of that it willtap, but markets were cheered by the fact that it was finallyowning up to needing help. In Europe, France's CAC-40 rose 2.1 percent to 3,115, while the DAXin Germany surged the same rate to 6,262. The FTSE index of leadingBritish shares was up 1.3 percent to 5,508. Spain's Ibex rose by aneven stronger 2.5 percent. The euro, which had surged over the weekend on news of the Spanishaid deal, gave up some of those gains, trading 0.5 percent lower at$1.2576 on Monday. Stock markets in the U.S. were also set to open higher. Dow futureswere up 0.8 percent to 12,604 while S&P futures rose 0.8percent to 1,332. Asian stocks gained ground earlier in the day followingbetter-than-expected data on the weekend that showed China'sexports jumped in May from a year earlier. Japan's Nikkei 225 index climbed 2 percent to close at 8,624.90.South Korea's Kospi added 1.7 percent to 1,867.04 and Hong Kong'sHang Seng added 2.4 percent to 18,953.63. Benchmarks in Singapore,Taiwan, mainland China, Indonesia and New Zealand also rose. "The decision to grasp the nettle looks set to be greetedpositively by the markets for the time being, but it is likely tobe no more than a relief pop," said Michael Hewson, an analyst atCMC Markets. "The decision by Spanish PM Rajoy to acquiesce to theinevitable and request help for Spain's ailing banking sector atthe weekend is the first sign of an acknowledgment of the problemsfacing the Spanish economy, but the fact it took so long in theface of so much denial remains a problem with respect to thecredibility of the Spanish administration." With Spain taken care of for the moment, investors will now turntheir attention to the thornier issue of Greece, where voters headto the polls this coming weekend in an election likely to determinewhether the debt-mired country will stick with the common currency.If Greece leaves the euro, that will raise questions of whetherother countries might, too. The Spanish rescue plan also doesn't address other critical issues. Take Italy, for example: government debt in the third-largest euroeconomy continues to pile up as its economic growth stagnates. Somefear it is only a matter of time before Italy becomes the nextcountry to ask for rescue money. "I think it's only a brief respite for the markets," said Tom Kaanof Louis Capital Markets in Hong Kong. "The 100 billion bailoutis hopefully setting up a firewall against a much worsedeterioration. Here we are, saving the banks. But what is next?" Spain is the fourth euro nation to seek a rescue, after Greece,Portugal and Ireland. A financial crisis has gripped Spain since2008, when a real estate bust caused big losses for many banks. The rise in equities also drove oil higher. Benchmark oil for Julydelivery was up 92 cents $85.02 per barrel in electronic trading onthe New York Mercantile Exchange. ___ Pamela Sampson contributed to this report from Bangkok. We are high quality suppliers, our products such as China IPS e.max , China Cosmetic Dental Veneers for oversee buyer. To know more, please visits Dental Inlays And Onlays.
Related Articles -
China IPS e.max, China Cosmetic Dental Veneers,
|
