Wall St joins global cheer for EU deal

New York/London - US stocks jumped more than 2% at the opening on Thursday after European leaders agreed to boost the region’s bailout fund and struck a deal with banks and insurers to accept 50% losses on Greek bonds.
 
The Dow Jones industrial average gained 258.00 points, or 2.17%, to 12 127.04. The Standard & Poor’s 500 Index jumped 30.31 points, or 2.44%, to 1 272.31.

The Nasdaq Composite Index climbed 67.87 points, or 2.56%, to 2 718.54.

European shares extended gains with banks surging after European Union leaders struck a deal to help resolve the eurozone debt crisis.
 
At 13:21 GMT, the FTSEurofirst 300 index of top European shares was up 3.9% at 1 022.33 points, and had gone as high as 1 024.05, the highest in 12 weeks. The STOXX Europe 600 Banking Index rose 9.7%.

Global relief rally

The rand surged against the dollar as investors flocked to higher-risk assets. It firmed 2.5% to hit a session high of 7.7625 to the dollar, its strongest since September 28.

The JSE also rallied in line with Asian and other markets. World stocks hit their highest level since early August.

The MSCI All-Country World Index climbed 2.5% to 312.81, its highest level in nearly three months, though it is still down 5.4% this year.

Reached after more than eight hours of hard-nosed talks between European heads of state, the International Monetary Fund and bankers, the deal also foresees a recapitalisation of hard-hit European lenders and a leveraging of the bloc's rescue fund to give it firepower of €1.0 trillion ($1.4 trillion).

"We are rallying today because the active players, mostly hedge fund managers and tactical investors, have been very neutral to even short until now. The market is up a lot, but they are rushing into getting long because they are capitulating," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"Investors will now focus on data for November, which is expected to get weak, and possibly worse in December. That could bring up a lot of questions and predictions on the Fed move."