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Madrid share prices soar on lifeline

Jun 11 2012 09:56

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Madrid - Madrid share prices soared nearly 6% in opening trade on Monday after the eurozone agreed to throw a lifeline to Spanish banks of up to €100bn.

In the first minutes of trade, the IBEX-35 index of leading companies shot up 388.3 points or 5.93% to a peak 6 940.3. After 15 minutes, the market was still up a healthy 4.60%.

Stricken lender Bankia, which has been nationalised by the government, jumped 20.52% at one point. It was still up 18.56% at €1.22 after the first quarter-hour of trade.

Spain's borrowing costs fell but remained at levels widely regarded as unsustainable over the longer term.

Spanish 10-year government bonds yields tumbled to a low of 6.017% from the previous close of 6.08%.

When compared to safe-haven German government 10-year bonds, the risk premium demanded for Spanish debt dropped to 4.62 percentage points from 4.89 points at the end of last week.

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