View more on these topics

European markets make big gains on EU summit deal

Markets have surged upwards following an agreement between European leaders on how to tackle Italy’s borrowing costs and ease the rules on bailout funds to help Spanish banks.

At close, the FTSE 100 was up 1.4 per cent to stand at 5571.15. Across Europe, the French Cac 40 and the German Dax were both up over 4 per cent. In Spain, the Madrid Ibex was up 5.7 per cent.

The FTSE eurofirst 300 is also up over 2.6 per cent, while in the US, the Dow Jones is up 1.8 per cent in early trades.

The jump in markets comes as investors have been moving away from safe havens to riskier assets in a bid to take advantage of the deal, which is designed to remove some of the anxiety over the fiscal condition of the eurozone.

The euro is up 1.93 per cent to the US dollar to $1.27.

Commodities have also seen a bounce with the price of Brent Crude Oil futures rising 4.5 per cent to $95.46 a barrel. The price of copper and zinc has also jumped by more than 2 per cent.

The news saw Italy’s 10-year bond yields fall to 4.5 per cent, while Spain’s eased to 5.8 per cent. This is some way below the critical 7 per cent mark considered the trigger point for countries to ask for bailouts.

F&C director of global strategy Ted Scott says: “Markets have given a muted thumbs-up to the outcome of the summit with equity markets up between 1 and 2 per cent and periphery bond yields falling.

“Overall, the summit went further than might have been expected thanks to some skilful and risky brinkmanship by Mario Monti of Italy. The main advance has been some real progress towards a banking union.It is being seen as a victory for the peripherals against the core countries, led by Germany.”


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. I am surprised that the markets have reacted so positively to the summit’s announcements because it is my understanding that these ‘arrangements’ or ‘facilities’ will only be brought in later in the year when the finer print has been worked out and when the body that will oversee them has sorted out what the rules will be.
    So I think we may be in for a correction on Monday or Tuesday.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm