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Business News/ Market / Stock-market-news/  Global shares rally after Russia-Ukraine deal, Swedish QE surprise
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Global shares rally after Russia-Ukraine deal, Swedish QE surprise

MSCI's all-country world index rises 0.99%, while the FTSEuroFirst index of 300 leading shares adds 0.75%

The Dow Jones industrial average rose 62.84 points, or 0.35%, to 17,924.98. The S&P 500 gained 12.71 points, or 0.61%, to 2,081.24 and the Nasdaq Composite added 33.34 points, or 0.69%, to 4,834.52. Photo: AFPPremium
The Dow Jones industrial average rose 62.84 points, or 0.35%, to 17,924.98. The S&P 500 gained 12.71 points, or 0.61%, to 2,081.24 and the Nasdaq Composite added 33.34 points, or 0.69%, to 4,834.52. Photo: AFP

New York: A cease-fire between Russian separatists and Ukrainian forces and surprisingly aggressive stimulus from Sweden’s central bank injected optimism into global equity markets, which had been numbed by a stalemate over Greece debt negotiations.

US treasury prices pulled up from overnight lows on data showing US consumer spending barely rose in January and higher-than-expected initial claims for state unemployment benefits, suggesting the economy started the first quarter on a softer note.

Stocks on Wall Street opened higher and European shares reversed opening losses, as they also took heart from a broadly positive raft of results on one of the busiest days in Europe’s corporate earnings calendar.

Even Greek stocks surged, with bank shares jumping 10%. Investors ignored the uncertainty after seven hours of talks in Brussels between Greece and its creditors failed to produce so much as a joint statement on the next steps, instead pinning their hopes on a deal being struck on Monday.

Investors also took cues from the ceasefire in Ukraine that will take effect from 15 February, and the Swedish Riksbank’s decision to cut interest rates below zero and buy government bonds.

“You have all these sort of overseas positives and two domestic negatives with the claims data and the retail sales data missing," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

The ceasefire deal came shortly after the International Monetary Fund announced a new four-year funding program for Ukraine that will total $40 billion.

MSCI’s all-country world index rose 0.99%, while the FTSEuroFirst index of 300 leading shares rose 0.75% to 1494.82.

The Dow Jones industrial average rose 62.84 points, or 0.35%, to 17,924.98. The S&P 500 gained 12.71 points, or 0.61%, to 2,081.24 and the Nasdaq Composite added 33.34 points, or 0.69%, to 4,834.52.

Major European indices hit multi-year highs, further boosted by encouraging corporate reports.

Sweden’s benchmark OMXS30 equity index hit a record high, while Germany’s DAX rose 1.7% to approach record levels and France’s CAC rose 1.2% to its highest in about seven years.

Shares of Swiss bank Credit Suisse and French car-maker Renault were among the leaders, rising 9.5% and 11.9%, respectively.

Sterling jumped after the Bank of England raised its UK growth and inflation forecasts, while Sweden’s surprise policy decision sent the crown to a six-year low against the dollar.

Sterling rose 0.8% against the euro to a seven-year high of 73.715 pence, before paring gains to turn slightly lower.

The Swedish crown fell by as much 2% against the dollar to hit 8.5512 crowns, its weakest since April 2009, before recovering somewhat to 8.4595 to the dollar, down about 1% on the day.

Elsewhere in currencies, the euro inched up 0.45% to $1.1382. Against the yen, the dollar fell 1.1% to 119.10.

The price of the benchmark 10-year US treasury fell 1/32 to yield 1.9827%.

Prices on Germany’s 10-year bund rose, pushing its yield down to 0.331%.

Brent crude prices rose nearly $2 after two days of declines, as a weakened dollar and industry spending cuts offset oversupply worries.

US crude was up $1.14 to $49.98 a barrel after dropping as much as 3% overnight, and Brent crude was up $1.80 at $56.46. Reuters

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Published: 12 Feb 2015, 10:39 PM IST
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