Sunday 4 December 2016

Greece confirms it will repay €450m IMF loan

Published 09/04/2015 | 22:00

Greek prime minister Alexis Tsipras shakes hands with Russian president Vladimir Putin in Moscow's Kremlin (AP)
Greek prime minister Alexis Tsipras shakes hands with Russian president Vladimir Putin in Moscow's Kremlin (AP)

World equity markets rose today, lifted after Greece confirmed it will pay a €450m loan tranche to the International Monetary Fund and on growing expectations the U.S. Federal Reserve will not raise interest rates until the latter part of the year.

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European markets also strengthened on German industrial output and trade data, which showed the continent's largest economy improving in February.

Wall Street edged lower, with focus on next week's flood of corporate earnings. The dollar strengthened, continuing a recovery from recent weakness. Oil prices rebounded from sharp declines on Wednesday.

The Dow Jones industrial average fell 4.34 points, or 0.02 percent, to 17,898.17, the S&P 500 gained 0.89 points, or 0.04 percent, to 2,082.79, and the Nasdaq Composite added 7.02 points, or 0.14 percent, to 4,957.85.

Europe's EuroFirst 300 index of leading shares was up 1 percent at a seven-year high of 1,627 points.

Britain's FTSE 100 was up 1.1 percent at 7,013 points and Germany's DAX was 0.8 percent higher at 12,136 points.

"While the risk of a Greek exit remains high, European equities continue to be supported by extremely low core euro area yields which remain at the bottom of recent ranges," Barclays said in a note on Thursday.

The benchmark German 10-year Bund yield fell to a record low of 0.146 percent. The low European yields fostered optimism for this afternoon's sale of $13 billion in 30-year U.S. bonds, as Treasuries carry higher yields than in Europe. Overall, Treasury yields rose and prices slipped, after the Labor Department said the four-week average of workers filing for first-time jobless benefits fell to the lowest since 2000.

Recent comments from Federal Reserve officials, including the release of minutes from the Fed's March policy meeting, suggest the committee will move in a measured fashion. Over the last few weeks, the market has been shifting expectations in favor of a rate increase later in the year.

However, on Wednesday, New York Fed President William Dudley said at a Reuters event that a June interest-rate increase was still possible if the labor market showed sufficient strength.

Currency traders were focused on this more hawkish message. The dollar index was up 0.2 percent, its fourth consecutive daily rise and its longest winning streak in three months. The euro was down 0.8 percent on the day at $1.0699 .

Crude oil took back some lost ground following a plunge overnight triggered by a rise in U.S. stocks and news of record Saudi oil production.

U.S. crude was up 1.1 percent to $50.94 a barrel after shedding nearly 7 percent on Wednesday. Brent rose 1.3 percent to $56.86.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 percent to its highest since mid-September. That marks nine straight winning sessions, best since September 2013.

Japanese stocks rose 0.75 percent to a 15-year high, while Hong Kong rose 2.7 percent to a seven-year peak.

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