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Italy's reform vote buoys euro, stocks

Nov 11 2011 18:24
Reuters
New York - Global equity markets surged and the euro rose against the U.S. dollar on Friday after Italy’s Senate approved economic reforms aimed at restoring investor confidence and clearing the way for a new government.

U.S. and European stocks jumped about 2 percent and the euro rose 1 percent on optimism that Italy was taking steps to quickly cut debt and ease market fears about the future of the euro zone.

The package of austerity measures demanded by the European Union will now go to the Italian lower house, where it is expected to be approved Saturday. That vote will trigger the resignation of Prime Minister Silvio Berlusconi.

The Monti factor

Former European Commissioner Mario Monti is widely expected to take over as head of a broad-based national unity government in Italy, a move many investors would welcome.

“If Monti comes in, that’s what the market wants, just as the ex-vice chair of the ECB is what the market wanted for Greece,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

Italy took over from Greece as the focus of investor angst over Europe’s debt crisis. At one point this week, Italian government debt went above 7 percent, a level many investors saw as unsustainable.
The euro was up 1 percent at $1.3730.

The FTSEurofirst 300 index of top European shares advanced 2.32 percent at 985.46. Wall Street followed.

The Dow Jones industrial average was up 260.20 points, or 2.19 percent, at 12,153.99. The Standard & Poor’s 500 Index was up 24.41 points, or 1.97 percent, at 1,264.10. The Nasdaq Composite Index was up 45.13 points, or 1.72 percent, at 2,670.28.

Brent crude oil futures increased 72 cents at $114.43 a barrel while U.S. light crude futures traded $1 higher at $98.78 a barrel.
Spot gold prices put on $17.31 to $1,775.60 an ounce.
markets volatility  |  europe debt crisis  |  italy  |  euro

 
 
 

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