LONDON |
LONDON (Reuters) - Investors breathed a sigh of relief on Monday after Greece's election eased fears that Europe's currency bloc would break up, boosting shares and sending the euro to a one-month high.
Greek voters gave a slim majority to parties supporting the country's economic bailout programme but analysts said the rally in financial markets might be limited by concerns about the world economy and problems in Spain and other euro zone members.
U.S. stock index futures and riskier commodities such as crude oil and copper also rose, while safe-haven assets like German bonds and gold fell after rallying last week on fears that the Greek vote could have unleashed financial turmoil.
"Even though the rally in risk may continue for a while, it is no time to get euphoric. The world economy is still in a bad shape and for Greece and others, formidable challenges still lay ahead," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
The euro was up around 0.6 percent at $1.2710, having climbed as far as $1.2748, its highest level in a month. The U.S. dollar index eased 0.3 percent.
The FTSE Eurofirst 300 index of top European shares jumped 1.1 percent to 1,004.20 points, while demand for bank shares saw the blue chip Euro STOXX 50 index advance by 1.3 percent. A rally across Asia earlier helped lift the MSCI world equity index 0.7 percent to 307.79.
Germany 10-year bond prices fell sending yields up as much as nine basis points to 1.54 percent, their highest level since mid-May. (Reporting by Richard Hubbard; Editing by Anna Willard)
Hong Kong Stocks Rise as Greek Vote Eases Euro Concern - Businessweek
Hong Kong stocks rose, with the benchmark index capping its biggest two-day gain since January, as projections showed pro-bailout parties won control of Greece’s parliament in an election viewed as a referendum on whether the debt-strapped country will stay in the euro.
HSBC Holdings Plc (HSBA), Europe’s largest bank, rose 1 percent. China Mengniu Dairy Co. gained 6.8 percent after Denmark’s Arla Foods said it plans to buy a stake in the milk producer. Hong Kong Exchanges & Clearing Ltd. fell 4.5 percent after Morgan Stanley said the bourse’s bid for the London Metal Exchange was “extremely expensive.”
The Hang Seng Index climbed 1 percent to 19,427.81 at the close. The gauge capped a two-day gain of 3.3 percent, the most since Jan. 18. All but five of 49 companies on the gauge advanced, with volume 11 percent below the 30-day average. The Hang Seng China Enterprises Index (HSCEI) of mainland stocks rose 0.8 percent to 9,818.76.
‘We’ve avoided the potential pitfalls of Greek exit from the Eurozone,” said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “I expect markets will be a bit happier in the short term before addressing longer-term issues.”
Hong Kong’s benchmark index rose 4 percent last week, its first weekly advance in six and the biggest increase since Jan. 20, amid speculation central banks will take steps to bolster economic growth in the face of Europe’s debt crisis. Companies on the Hang Seng Index traded at 9.9 times estimated earnings on average on June 15, compared with 12.9 for the Standard & Poor’s 500 Index and 10.2 for the Stoxx Europe 600 Index.
Greek Election
New Democracy won 129 seats, enough to put together a coalition with Pasok, easing concern that Greece would reject austerity measures needed to qualify for international aid. The parties would have 162 seats if they agree to govern together in the 300-member parliament, according to Interior Ministry projections with 99 percent of yesterday’s vote counted.
“Greece’s election is a good result and will provide some short-term relief,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “This will put to rest for a little while the prospect of Greece leaving the euro.”
Stocks also advanced after German Chancellor Angela Merkel’s government signaled willingness to loosen Greece’s austerity requirements so long as the nation abides by its obligations under the bailout program.
HSBC, Esprit
HSBC rose 1 percent to HK$67.45. Esprit Holdings Ltd. (330), a clothier that counts Europe as its biggest market, gained 1 percent to HK$10.24. Cosco Pacific Ltd., which operates a port in Greece, climbed 2 percent to HK$10.14.
China Mengniu jumped 6.8 percent to HK$21.15 after Denmark’s Arla Foods said it plans to buy about a 6 percent stake in the milk producer.
Samsonite International SA (1910), the world’s largest branded- luggage maker, jumped 7.6 percent to HK$13 after saying its products were safe following a report some contained carcinogens. The shares tumbled 16 percent on June 15 after the Hong Kong Consumer Council said handles of some Samsonite luggage contained materials which could cause cancer. The immediate danger is minimal, it said.
Chinese developers rose even after home values fell in a record 54 of 70 cities tracked by the government in May as developers cut prices to boost sales amid housing curbs. China will continue to conduct differentiated housing credit policies, the official Xinhua News Agency reported, citing an unidentified official from the Ministry of Housing and Urban-Rural Development.
Hong Kong Exchanges dropped 4.5 percent to HK$107.40. The bourse said after the market closed on June 15 it has agreed to pay 1.39 billion pounds ($2.15 billion) for the LME. The price was “extremely expensive” and the bourse will probably sell shares to finance the purchase, Morgan Stanley wrote in a report dated yesterday.
Hang Seng Index (HSI) futures expiring this month climbed 0.7 percent to 19,459. The HSI Volatility Index (VHSI) tumbled 12 percent to 24.56, a level indicating traders expect a swing of about 7 percent in the benchmark index during the next 30 days.
To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
Stocks, Euro Gain on Greek Pro-Bailout Vote - Businessweek
Spanish 10-year bond yields rose above 7 percent for the first time since the creation of the euro and U.S. stock-index futures fell, erasing gains, as concern about the region’s debt crisis outweighed optimism after pro-bailout parties won the most seats in Greek elections. European stocks and the euro swung between gains and losses.
The yield on the 10-year Spanish bond jumped 26 basis points to 7.13 percent at 10:24 a.m. in London. Standard & Poor’s 500 Index futures lost 0.3 percent. The Stoxx Europe 600 Index added less than 0.1 percent after dropping as much as 0.3 percent. The euro appreciated less than 0.1 percent to $1.2645 after rising as much as 0.9 percent, while the yen fell against all 16 of its most-traded peers.
“Any relief following the Greek election results should be brief,’” Ciaran O’Hagan, head of interest-rate strategy at Societe Generale SA in Paris, wrote today in an e-mailed note. “At best, we are facing a muddle-through scenario in Greece. The focus now returns to Spain, where the latest developments continue to trouble us.”
Bad loans as a proportion of total Spanish lending jumped to 8.72 percent in April, the highest since 1994, from 8.37 percent in March, the Bank of Spain said on its website today. Stocks and the euro rallied earlier after the New Democracy and Pasok parties won 162 seats, enough to form a majority in the 300-member parliament, according to Interior Ministry projections, easing concern that Greece would reject austerity measures needed to qualify for aid.
G-20 Meeting
Group of 20 nations are discussing a mix of measures that will include deficit reduction for some countries and pledges for additional stimulus by others with sounder finances, a Canadian official said as leaders prepare for a two-day summit in Mexico.
Three stocks advanced for two that fell in the Stoxx 600. Bankia SA, Spain’s nationalized lender, sank 5.5 percent. Cable & Wireless Worldwide Plc advanced 7.9 percent as the company’s largest investor, Orbis Holdings Ltd., said it will accept a 1.04 billion-pound ($1.6 billion) takeover offer from Vodafone Group Plc.
The ASE Index of Greek stocks rallied 5.6 percent to the highest level in a month as National Bank of Greece SA and EFG Eurobank Ergasias SA climbed more than 15 percent.
Futures on the S&P 500 erased an earlier gain of as much as 0.7 percent.
Spain, Italy Bonds
The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, climbed 0.1 percent, erasing a drop of as much as 0.5 percent. The euro was 0.5 percent stronger versus the yen, down from as high as 1.4 percent.
The Spanish 10-year bond yield jumped as much as 27 basis points to 7.14 percent, with Italy’s 10-year yield climbing 15 basis points to 6.07 percent. The U.K. two-year gilt yield slid to 0.173 percent, the lowest on record.
The MSCI Emerging Markets Index (MXEF) rose 1 percent, poised for the highest close since May 15. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies listed in Hong Kong rose 0.8 percent. India’s Sensex Index dropped 1.5 percent after the central bank unexpectedly kept interest rates unchanged.
Corn jumped 2 percent as dry weather may curb production in the U.S. Copper advanced 0.6 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
STOCKS NEWS EUROPE-Banks set for Greek vote boost - Exane - Reuters UK
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Stocks Advance With Euro After Pro-Bailout Greek Victory - Bloomberg
Spanish 10-year bond yields rose above 7 percent for the first time since the creation of the euro and U.S. stock-index futures fell, erasing gains, as concern about the region’s debt crisis outweighed optimism after pro-bailout parties won the most seats in Greek elections. European stocks and the euro swung between gains and losses.
The yield on the 10-year Spanish bond jumped 26 basis points to 7.13 percent at 10:24 a.m. in London. Standard & Poor’s 500 Index futures lost 0.3 percent. The Stoxx Europe 600 Index added less than 0.1 percent after dropping as much as 0.3 percent. The euro appreciated less than 0.1 percent to $1.2645 after rising as much as 0.9 percent, while the yen fell against all 16 of its most-traded peers.
“Any relief following the Greek election results should be brief,’” Ciaran O’Hagan, head of interest-rate strategy at Societe Generale SA in Paris, wrote today in an e-mailed note. “At best, we are facing a muddle-through scenario in Greece. The focus now returns to Spain, where the latest developments continue to trouble us.”
Bad loans as a proportion of total Spanish lending jumped to 8.72 percent in April, the highest since 1994, from 8.37 percent in March, the Bank of Spain said on its website today. Stocks and the euro rallied earlier after the New Democracy and Pasok parties won 162 seats, enough to form a majority in the 300-member parliament, according to Interior Ministry projections, easing concern that Greece would reject austerity measures needed to qualify for aid.
G-20 Meeting
Group of 20 nations are discussing a mix of measures that will include deficit reduction for some countries and pledges for additional stimulus by others with sounder finances, a Canadian official said as leaders prepare for a two-day summit in Mexico.
Three stocks advanced for two that fell in the Stoxx 600. Bankia SA, Spain’s nationalized lender, sank 5.5 percent. Cable & Wireless Worldwide Plc advanced 7.9 percent as the company’s largest investor, Orbis Holdings Ltd., said it will accept a 1.04 billion-pound ($1.6 billion) takeover offer from Vodafone Group Plc.
The ASE Index of Greek stocks rallied 5.6 percent to the highest level in a month as National Bank of Greece SA and EFG Eurobank Ergasias SA climbed more than 15 percent.
Futures on the S&P 500 erased an earlier gain of as much as 0.7 percent.
Spain, Italy Bonds
The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, climbed 0.1 percent, erasing a drop of as much as 0.5 percent. The euro was 0.5 percent stronger versus the yen, down from as high as 1.4 percent.
The Spanish 10-year bond yield jumped as much as 27 basis points to 7.14 percent, with Italy’s 10-year yield climbing 15 basis points to 6.07 percent. The U.K. two-year gilt yield slid to 0.173 percent, the lowest on record.
The MSCI Emerging Markets Index (MXEF) rose 1 percent, poised for the highest close since May 15. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies listed in Hong Kong rose 0.8 percent. India’s Sensex Index dropped 1.5 percent after the central bank unexpectedly kept interest rates unchanged.
Corn jumped 2 percent as dry weather may curb production in the U.S. Copper advanced 0.6 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
Stocks Decline as Spanish Bond Yields Climb
Angel Navarrete/Bloomberg
A visitor watches stock price movements inside the Madrid stock exchange in Madrid.
A visitor watches stock price movements inside the Madrid stock exchange in Madrid. Photographer: Angel Navarrete/Bloomberg
June 18 (Bloomberg) -- Viktor Shvets, the head of thematic equity research at Credit Suisse Group AG in Hong Kong, talks about the outlook for the European sovereign debt crisis, its implications for global markets and investment strategy. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
June 17 (Bloomberg) -- Greece avoided political and financial chaos as voters gave a narrow victory to pro-bailout parties in Sunday's election. But it won't be easy for first-place finisher New Democracy to form a coalition government. Bloomberg TV Economics Editor Michael McKee reports from Athens. (Source: Bloomberg)
Swiss stocks - Factors to watch on June 18 - Reuters
ZURICH, June 18 |
ZURICH, June 18 (Reuters) - Swiss stocks were expected to soar on Monday, with markets across Europe expected to open sharply higher after Greek election results showed that parties committed to staying in the euro zone won a slim parliamentary majority.
Futures for the blue-chip SMI were up 67 points at 5,956 points at 0608 GMT.
The following are some of the main factors expected to affect Swiss stocks on Monday:
CREDIT SUISSE
Credit Suisse has no plans to issue new shares after the Swiss central bank called on it to improve its capital base this year, but should be able to do so by retaining earnings, Chief Executive Brady Dougan was quoted as saying on Sunday.
For more, see
COMPANY STATEMENTS
* Myriad announced that the recommended increased share offer for the entire issued and to be issued ordinary share capital of Synchronica had been declared unconditional in all respects.
* AC Immune and Roche's Genentech enter into second antibody collaboration for alzheimer's disease.
ECONOMY
* Parties supporting a bailout saving Greece from bankruptcy won a slim parliamentary majority on Sunday, beating radical leftists who rejected austerity and bringing relief to the euro zone which was braced for fresh financial turmoil.
For more, see
RBI Monetary Policy: banks, autos, realty stocks tank on status quo - Economic Times
The central bank left key interest rates and the cash reserve ratio for banks unchanged, defying widespread expectations for a rate cut.
RBI said while growth has moderated, inflation remains above comfort levels. The central bank said factors other than interest rates were contributing to the growth slowdown.
Most market participants expected the RBI to slash its key policy rates by 25 basis points to boost economic growth as well as cut the cash reserve ratio.
"Markets expected the RBI to cut rates to boost growth which it did not do. It will take some more time for the monetary easing theme to play out in the near term. We will have to wait for policy action from the government on reforms for growth to pick up," Gajendra Nagpal, CEO at Unicon Investment Solutions, said.
Banking stocks are likely to bear the brunt, he added.
Most sectoral indices slipped into the negative zone, led by banking and realty indices. The rate-sensitives slipped 1.5-2 percent.
The BSE Banking Index was trading 2.5 percent lower led by losses in IDBI Bank, which was trading 3.5 percent lower at Rs 88.60; SBI, which slipped 3.2 percent to Rs 2,113.00; ICICI Bank, which dropped 2.5 percent to Rs 823.53; and HDFC Bank, which was down 2.8 percent to Rs 532, at 12 p.m..
The BSE Auto Index was trading 0.5 percent lower led by losses in Ashok Leyland, which was trading 2.5 percent lower at Rs 25.25; Maruti Suzuki, which slipped 1.5 percent to Rs 1,091; and Bharat Forge, which was down 2 percent to Rs 303.
The BSE Realty Index was trading 2.4 percent lower led by losses in Indiabulls Real Estate, which was trading 4 percent lower at Rs 54.55; Unitech, which dropped 3.2 percent to Rs 20.80; and DLF, which was down 3.8 percent to Rs 189.30.
In the construction sector, GMR Infra, HDIL and Lanco Infra were trading 0.5-2 percent lower on the Bombay Stock Exchange.
The Sensex was trading 185 points lower, or 1.1% at 16,768.69.
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