Rescue plan sparks markets rally

09:47, May 11, 2010      

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Financial markets rocketed Monday after the EU and IMF agreed a rescue package of nearly $1 trillion for the eurozone.

Following strong gains for Asian stocks, London's benchmark FTSE 100 index surged 5 percent in morning deals, led by banks and mining companies, as investors also reacted to signs of progress on the formation of a new British government.

The Frankfurt stock market's DAX index of leading shares gained more than five percent Monday following the massive rescue package.

The Athens stock exchange soared by more than 10 percent to 1,794.24 points during trading, also boosted by a massive easing of Greece's borrowing rates, with the yield on 10-year government bonds at 6.39 percent compared to 12.17 percent Friday.

US stocks bounced back, with the blue-chip Dow index up more than 300 points or three percent at opening.

The euro rebounded to $1.30 from $1.27 late in New York Friday, while the traditionally safe-haven yen slid against its peers as risk appetite returned to markets.

After a week-long slump, oil prices also rebounded sharply Monday as the euro recovered against the dollar.

"Eurozone policymakers surprised probably even the most optimistic observers by presenting a quick and forceful, unprecedented crisis package," ING said in a note. "It does not solve the fundamental fiscal problems but it gives countries now several years."

Source: Global Times
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