A last-minute deal to save the banking system in Cyprus has resulted in stocks rallying almost everywhere, with the US shares market also expected to make gains. Investors expressed hope the deal would work.
European shares pointed sharply upwards in early trading Monday, after Cyprus secured a bailout deal designed to save its eurozone membership and restructure the domestic banking system.
The 17-member bloc's Euro STOX 50 index was up 1.3 percent only minutes after trading started. Banks owning a large part of the region's debt and depending on the wholesale funding market rallied 2 percent. The pan-European FTSEurofirst gained 0.8 percent.
Britain's top share index also advanced as sentiment improved following the Cyprus deal. The FTSE 100 was up 0.5 percent after falling 1.5 percent last week amid market uncertainties.
Market confidence, but for how long?
The euro rose to a session high of $1.3050, moving away from a four-month low of $1.2844 last Tuesday.
The MSCI broadest index of Asia-Pacific shares outside Japan soared 1.1 percent, bouncing off a three-month low hit earlier last week. South Korean stocks even jumped by 1.5 percent, while Hong Kong shares closed 0.6 percent higher, with Japan's Nikkei index up 1.7 percent at the end of Monday's session.
Investment managers said they expected US shares also to open higher. "US investors won't care too much about who takes losses in Cyprus as long as there's a bailout that stops the run on banks and keeps the eurozone stable," ING Investment Management economist Karyn Cavanaugh said in a statement.
hg/hc (Reuters, AP)