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GLOBAL MARKETS-Shares rally on Russia-Ukraine deal, Swedish QE surprise
February 12, 2015 / 8:42 PM / 3 years ago

GLOBAL MARKETS-Shares rally on Russia-Ukraine deal, Swedish QE surprise

* Russia-Ukraine cease-fire deal struck

* Sweden goes bold with negative rates in monetary easing

* U.S. economic data shows weakness (Adds oil settlement prices)

By Herbert Lash

NEW YORK, Feb 12 (Reuters) - Major U.S. and European equity indices rallied to multiyear or record highs on Thursday after a cease-fire between Russian separatists and Ukrainian forces and surprisingly aggressive stimulus by Sweden’s central bank cheered global markets.

U.S. Treasury prices wavered as data showed U.S. consumer spending barely rose in January and initial claims for state unemployment benefits rose more than expected, suggesting the economy started the first quarter on a softer note.

The Nasdaq Composite surged past multiyear highs reached in December to levels last seen in March 2000. The index was about 280 points from an all-time high set earlier that month during the tech bubble.

European shares reversed early losses on a broadly positive raft of results on one of the busiest days in Europe’s earnings calendar.

Even Greek stocks rose sharply, with the country’s main index rising 6.7 percent as investors held out hope that the new Greek government could reach a deal with international creditors over the country’s bailout.

Investors also took cues from the cease-fire in Ukraine that will take effect from Feb. 15, and the Riksbank’s decision in Sweden to cut interest rates below zero and buy government debt.

“You have all these sort of overseas positives and two domestic negatives with the claims data and the retail sales data missing,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.

The cease-fire deal came shortly after the International Monetary Fund announced a new four-year funding program for Ukraine that will total $40 billion.

MSCI’s all-country world index rose 1.22 percent, while the FTSEuroFirst index of 300 leading shares rose 0.64 percent to close at 1,493.22, a level last reached more than seven years ago.

The S&P information technology sector rose 1.54 percent in its third straight daily advance. Cisco Systems climbed 9.2 percent to $29.41 in the network equipment maker’s biggest one-day jump since May 2013 after reporting earnings and revenue that beat expectations.

The Dow Jones industrial average rose 100.48 points, or 0.56 percent, to 17,962.62. The S&P 500 gained 18.92 points, or 0.91 percent, to 2,087.45 and the Nasdaq Composite added 51.05 points, or 1.06 percent, to 4,852.23.

Major European indexes hit multi-year highs, further boosted by encouraging corporate reports.

Sweden’s benchmark OMXS30 equity index hit a record high, while Germany’s DAX rose 1.6 percent to approach record levels and France’s CAC rose 1.0 percent to its highest in about seven years.

Shares of Swiss bank Credit Suisse and French car-maker Renault were among the leaders, rising 9.1 percent and 11.5 percent, respectively.

Sterling jumped after the Bank of England raised its UK growth and inflation forecasts, while Sweden’s surprise policy decision sent the crown to a six-year low against the dollar.

Sterling rose 0.8 percent against the euro to a seven-year high of 73.715 pence, before paring gains to turn slightly lower.

The Swedish crown fell by as much 2 percent against the dollar to hit 8.5512 crowns, its weakest since April 2009, before recovering somewhat to 8.4331 to the dollar, down about 0.7 percent on the day.

Elsewhere in currencies, the euro inched up 0.71 percent to $1.1412. Against the yen, the dollar fell 1.3 percent to 118.89.

The price of the benchmark 10-year U.S. Treasury was little changed to yield 1.9861 percent.

Prices on Germany’s 10-year bund rose, pushing its yield down to 0.324 percent.

Brent crude prices rose more than $2 after two days of declines, as a weakened dollar and industry spending cuts offset oversupply worries.

U.S. crude rose $2.37 to settle at $51.21 a barrel after dropping as much as 3 percent overnight, and Brent crude gained $2.29 to settle at $57.05.

To read Reuters Global Investing Blog click here for the MacroScope Blog click on for Hedge Fund Blog Hub click on (Reporting by Herbert Lash; Editing by Meredith Mazzilli and Andrew Hay)

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