Shares and euro rebound on hope Cyprus seals a deal
Published 22/03/2013 | 15:06
GLOBAL equity markets and the euro rebounded today on hopes Cyprus will avert a financial collapse next week, taking succor from an agreement that shielded Greek banks from the Cypriot crisis.
Wall Street opened higher and European stocks edged higher after Greece and Cyprus said that Greek banks had agreed to buy the local units of stricken Cypriot banks.
The euro rose 0.43 percent to $1.2952 even as Cyprus' increasingly isolated leaders scrambled to strike a bailout deal with the European Union by Monday after Russia rebuffed Cypriot entreaties for aid.
At least three Greek banks including Alpha Bank and Piraeus are ready to buy the units of the three Cypriot lenders in Greece, and the country's bank support fund was meeting to pick a buyer, officials told Reuters.
"It seems that investors are expecting a deal before the Monday deadline. So they're not placing new shorts on the euro going into the weekend. They don't want to be caught on the wrong side of the bet in case a deal does materialize," said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut.
Wall Street was lifted by retail stocks, the day's top gainers, on upbeat outlooks and results from Tiffany & Co and Nike Inc.
"While the market may be vulnerable because it's up so much, the U.S. economy is in a better shape and better position to withstand the whole euro zone and Cyprus situation," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab.
The Dow Jones industrial average was up 82.13 points, or 0.57 percent, at 14,503.62. The Standard & Poor's 500 Index was up 9.13 points, or 0.59 percent, at 1,554.93. The Nasdaq Composite Index was up 16.00 points, or 0.50 percent, at 3,238.60.
The pan-European FTSEurofirst 300 was up 0.21 percent at 1193.27.
MSCI's all-country world equity index gained 0.27 at 358.77.
Oil prices rose above $107 a barrel. Brent crude for May delivery was up 27 cents at $107.74 a barrel. U.S. crude for May was at $93.17, up 72 cents a barrel.
The benchmark 10-year U.S. Treasury note was down 7/32 in price to yield 1.9372 percent