European shares at one week highs on summit surprise
EUROPEAN shares rose to one-week highs on Friday after euro zone leaders agreed at an EU summit to take emergency action to bring down Italy's and Spain's spiralling borrowing costs, surprising a market that had been primed for disappointment.
The FTSEurofirst 300 was up 1.7 percent at 1,012.45 by 0716 GMT, recovering after a 0.5-percent drop in the previous session, trading it back to levels last seen on June 21.
The summit agreed that euro area rescue funds could be used to stabilise bond markets without forcing countries that comply with EU budget rules to adopt extra austerity measures or economic reforms.
The deal had followed Spain and Italy's earlier withholding of support for a growth package.
"The most positive thing of this summit was that everybody came out claiming victory. The underlying tone though was one of threats," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500 million of assets
"It remains to be seen how this will solve the real issues as opposed to pushing them out further once again."