Greek bailout lifts euro

Asian stocks rose and the euro climbed to a two-week high this morning after European leaders agreed last night on a package to rescue debt-stricken Greece and gains will be sustained if U.S. policymakers also manage to cobble together a last minute deal.

22 July 2011, 12:00am

2 min read

European shares are set to open higher with financial spread betters expecting major indices to open between 0.6 to 0.7 percent higher.

Even as markets greeted the Europe rescue package news with relief, the single currency still faces considerable headwinds in its march towards a early May peak of near US$1.50 as doubts regarding longer-term effectiveness of the deal remained.

For now, euro-sensitive plays, such as Japanese stocks including Canon <7751.T> and Nikon <7731.T> climbed, benefiting from the currency's strength, which would boost their exports.

Hong Kong shares <.HSI> were the clear outperformers in the region for the day with HSBC Holdings <0005.HK> -- which makes up a chunky 15 percent of Hong Kong's Hang Seng index -- up nearly 3%, helping the index gain 1.7 percent.

An emergency summit of leaders of the 17-nation currency area pledged to conduct a second bailout of Greece with an extra €109 billion of government money, plus a contribution by private sector bondholders estimated to total as much as €50 billion by mid-2014.

Investors who have been stricken by a series of factors ranging from the U.S. and Europe debt crises to concerns about a sharp slowdown in China used this rare bit of good news to pick up bargains.

Demand for risk was also rekindled as hopes of a breakthrough in the U.S. debt deadlock gathered momentum with the White House and top lawmakers scrambling to sort through competing options before a August 2 deadline.

In currency markets, the euro vaulted more than 1% to as high as US$1.4440 on trading platform EBS in early trades, the highest level since July 6, before easing slightly to us$1.4385, up more than a percent since yesterday.

The single currency's way forward is strewn with technical resistance levels in the areas of 1.4458, 1.4493 and 1.4519.

Barclays Capital said the latest rescue package remains short of key details in areas like private sector involvement and the proposed size of the euro zone's rescue fund.

Elsewhere, gold fell to around US$1,590 an ounce, about US$20 below a record high of near US$1,610 set on Tuesday. Silver tumbled more than 2%.

In bond markets, yields on ten-year U.S. Treasury notes stabilised around 3% after rising by more than 12 basis points in the past three sessions.

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Mela la l-Ewro issoda, issa torhos il-Hajja, il-fuel, id-dawl u inkunu nistaw ingemmu xi haga, ghal meta nigu bzonn.

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@Haha Fl'opinjoni tieghek, allura x'tahseb li jaqbel li jsir?????????????

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Nothing but Market manipulation to shock and awe the common people. What has really changed by all this fanfare? Greece still needs to generate funds to service all these debts and chances are the the other troubled countries in the eurozone will continue to have yearly deficits and runaway national debts. This move is a simple maneuver to kick this default problem down the road as the EU hopes to try and find a better solution.

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L-ewro jinsab fl-afja tal-mewt. Din bħal meta wieħed ikun wasal fl-aħħar ta' ħajtu u jagħtuh l-ossiġinu. JIdher ftit aħjar imma ma jkollux ħajja għax wara ftit jitlaw.