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Spain, banks boost markets

Wednesday, July 11, 2012 - 01:46

July 11 - European shares edge higher as investors take heart from new taxes and spending cuts announced by Spain as it moves to meet financial targets. Jamie McGeever reports.

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Some fortitude and resilience from European markets on Wednesday, as investors coped with the latest twists and turns in the euro zone crisis. Spanish bond yields fell further below the key 7 percent level, after Madrid unveiled another wave of austerity worth some 65 billion euros over the next couple of years. Italian yields edged back below 6 percent. Demand for safe-haven assets remained strong though - Germany sold 10-year bonds at a record low yield of only 1.31 percent. And further uncertainty will keep investors on their toes. So says Orlando Green of Credit Agricole CIB. SOUNDBITE: Orlando Green, Interest Rate Strategist, Credit Agricole Corporate and Investment Bank saying: "There's still that hope that we will have more transperancy and certainly a clearer idea of where we are going in terms of the rescue effort and the display of unity that we are seeing, albeit in a gradual fashion by the EU politicians. I think we started to see that at the EU summit over a week ago. I think that is a good step at least in the near-term, but of course more information is needed, and more progress." The positive signals from bond markets helping equity investors forget for a moment that global economic weakness is starting to seep into corporate profitability. European stocks just about in positive territory…supported by a strong outperformance of banks, which rose almost 1 percent. The euro bounced off a 2-year low against the dollar to test 1.23 again…but hit a fresh three-and-a-half year low against sterling, below 79 pence. Jamie McGeever, Reuters.

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Spain, banks boost markets

Wednesday, July 11, 2012 - 01:46