Loading...
See More

Markets rise prompting investors to buy

May 18 2011 12:51 Reuters

Related Articles

Asia stocks up amid caution

Vodafone, BP lifts FTSE

Asian shares mixed on Greek debt fears

Wall Street falls on euro zone concerns

European equities slide on Strauss-Kahn

Global stocks hit 1-month low

 

London - World stocks climbed off four-week lows on Wednesday and the euro recovered some ground against the dollar as investors sought bargains in recently hard-hit markets.

The hunt for cheaper assets, however, was tempered by disappointing US economic data and continuing concerns about the eurozone's struggle to control debt in its peripheral economies, particularly Greece.

Europe's top financial officials broke a taboo on Tuesday and acknowledged for the first time that Greece may have to restructure its debts, a move which could stoke Europe's sovereign debt crisis..

Germany and recently bailed-out Portugal were to auction bonds later in the day, providing a test of demand at both extremes of the eurozone economy.

World stocks as measured by MSCI were up 0.6%, bouncing off Tuesday's losses, which took the index to its lowest since April 18.

Europe's FTSEurofirst 300 gained around half a percent.

Investors have become more cautious in the past month faced with unanswered questions about slow US growth, Chinese overheating and Europe's debt woes.

US factory output slipped for the first time in 10 months in April as a shortage of parts from disaster-hit Japan crimped activity.

While many investors consider the overall outlook to be positive, those sort of signs have led to a pull back from risk.

"It seems to me that we are going to be stuck in a trading range for a little while," said Mike Lenhoff, chief strategist at Brewin Dolphin.

Earlier, Japan's Nikkei climbed 1%, helped by a weaker yen and hence better exporting prospects.

Euro climbs

The euro rose against the dollar, recovering from a seven-week low earlier in the week, but wariness over Europe's sovereign debt problems kept investors nervous about piling up euro positions.

"The euro is still in a correction phase after recent declines," said Hideki Amikura, a forex manager at Nomura Trust and Banking. "It has the potential to advance towards $1.43-$1.44 on hopes for more buybacks by foreign investors."

The single currency gained 0.2% to $1.4263. It slumped to a seven-week low of $1.4048 on Monday.

German government Bunds fell ahead of Wednesday's auction. But core debt was still seen as benefitting from the questions over the eurozone's struggling periphery, following the first admission by a major policymaker that some form of restructuring was on the cards for Greece.

"I don't think it's great for Europe at all," one trader said. "It's an issue that's going to go on for some time and it's a support for Bunds."

europe debt crisis  |  markets  |  euro
NEXT ON FIN24X

 

Lastest Articles

Here is how to check your credit score and manage it Read More...
Top tips to save money over the festive period Read More...
These are the top 5 most fuel efficient cars in SA Read More...
What to consider when switching medical aid schemes Read More...
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...