A roundup of trading on major world markets:
NEW YORK – US stocks shrugged off more eurozone turmoil to rack up solid gains on Thursday, helped by earnings reports, slightly improved jobs numbers and the European Central Bank’s interest rate cut.
The blue-chip Dow Jones Industrial Average closed up 208.43 points (1.76 per cent) at 12,044.47.
The tech-heavy Nasdaq Composite piled on 57.99 points (2.20 per cent) to 2,697.97, while the S&P 500-stock index, a broader measure of the markets, gained 23.25 points (1.88 per cent) to 1,261.15.
Bond prices fell. The yield on the 10-year Treasury rose to 2.07 per cent from 2.01 per cent Wednesday, while that on the 30-year Treasury climbed to 3.12 per cent from 3.04 per cent.
Bond yields and prices move in opposite directions.
LONDON – The surprise European Central Bank rate cut sent stock markets soaring as investors tried to get ahead of the latest Greek twists and turns in the eurozone debt crisis.
Dealers said the quarter point cut to 1.25 per cent was even more unexpected as it came at the first policy meeting chaired by new ECB chief Mario Draghi – known as ‘Super Mario’ in his native Italy for his self-assured record.
The gloomy and increasingly uncertain backdrop of Greece in turmoil over its latest bailout package and rising borrowing costs for eurozone governments, including France, meant the move got a tremendous welcome on the markets which had been hoping for help from the G20 summit in Cannes, France.
In an initial burst, Paris, Frankfurt and Milan all jumped by 3.0 per cent or more, then fell back steadily before advancing strongly again by the close.
In London, the FTSE-100 index of top companies gained 1.12 per cent at 5,545.64 points. In Paris, the CAC-40 jumped 2.73 per cent to 3,195.47 points and in Frankfurt the DAX 30 added 2.81 per cent at 6,133.18 points.
In under-pressure Italy, Milan finished up 3.23 per cent while Madrid put on 1.61 per cent.
The euro fell sharply on the ECB rate cut lead but in late trade recovered to trade at $US1.3787, up from $US1.3746 in New York late on Wednesday.
The dollar was easier at 77.95 yen after trading at 78.06 yen.
Borrowing costs for eurozone governments rose sharply, especially Italy, with Prime Minister Silvio Berlusconi under intense pressure to come up with reforms and austerity measures to ease the country’s strained public finances.
The yield on Italian 10-year government bonds at one stage hit 6.402 per cent, topping the 6.397 per cent reached in August when the ECB was forced to intervene to prop up the bond market.
HONG KONG – Asian markets fell on renewed fears for the eurozone after Greece was dealt an ultimatum over its plan to hold a referendum on last week’s deal to tackle the region’s debt crisis.
However, the euro bounced back from earlier lows after news emerged that Greece’s finance minister came out against his prime minister’s plan for the national poll, lifting hopes it might not go ahead.
Hong Kong tumbled by 2.49 per cent, or 491.21 points, to 19,242.50, Sydney ended off 0.30 per cent, losing 12.7 points, to 4171.9 and Seoul shed 1.48 per cent, or 28.05 points, to 1869.96.
Tokyo was closed for a public holiday.
The euro, which tumbled against the yen and US dollar in Asian morning trade, rebounded in Europe. The common unit was at $US1.3752 early in London from $US1.3746 in New York late on Wednesday.
The euro also rose against the yen, buying 107.32 yen compared with 107.28 yen in New York. The dollar held up following its gains against the yen this week after the Japanese government intervened to cap the unit’s rise.
Shanghai was 0.16 per cent, or 3.98 points, higher at 2508.09 by the close.
Singapore fell by 0.87 per cent, or 24.71 points, to 2810.04.
WELLINGTON – Wellington closed flat, edging up 2.62 points to 3311.51.
