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Euro rises, Greek spreads fall after EU verdict

Euro rises, Greek spreads fall after EU verdict
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First Published: Wed, Feb 03 2010. 09 34 PM IST
Updated: Wed, Feb 03 2010. 09 34 PM IST
London: The euro rose on Wednesday while the premium that investors pay for Greek debt fell as the European Commission endorsed Athens’ budget plans and stocks extended gains on hopes that the global economy will maintain momentum.
A closely watched survey showed that the euro zone’s dominant service sector expanded at a slower pace in January than in the previous month but that firms had grown more optimistic about the year ahead.
Brussels urged Greece to take further steps to cut public sector wages and put its finances in order. Greece’s fiscal woes have prompted concerns across Europe, sparking a sell-off in peripheral euro zone government bonds from the likes of Italy, Portugal and Spain and putting pressure on the euro itself.
“Investors were very nervous last week but worries over Greece have receded as has concern about bank bashing by (US President Barack) Obama and data was good yesterday (Tuesday),” said Steven Bell, director at hedge fund GLC.
The euro rose 0.3% to $1.4013 (Rs64.46) while the FTSEurofirst 300 index gained around one-third of a per cent on the day.
MSCI world equity index rose 0.5%, having hit a three-month low on Monday, before recovering to end up on the day. US stock futures rose 0.18%, pointing to a firmer open on Wall Street.
Emerging stocks rose 1.8%, while Chinese stocks jumped 2.4%, their biggest gain in six weeks.
US crude oil rose 0.7% at $77.77 a barrel. The dollar fell 0.2% against a basket of major currencies.
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First Published: Wed, Feb 03 2010. 09 34 PM IST