Wednesday, June 29, 2011

Sentiment revives ahead of vital Greek vote

Financial Times
June 28, 2011

Stocks rallied to their best performance in a week as markets reacted calmly before the potential storm of Greek parliamentary voting on austerity plans.

Investors shrugged off weak economic data stateside for the second day in a row as US equities spearheaded a global rise in risk assets that also saw strong gains for crude oil.

The traditional havens of core government bonds and the dollar sold off while there was a measure of market relief that a €7.9bn Italian bond auction passed off with solid demand, even though borrowing costs rose to their highest in three years.

“Despite violence in Athens as Greece embarks on a 48-hour strike in protest at the probable passing of the forthcoming stringent austerity budget, optimism that Greece would step back from the brink has seen risk appetite return,” said Michael Hewson, of CMC Markets.

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