Global shares, euro rise on ECB plan hopes

Mon Aug 6, 2012 4:44pm EDT
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By Leah Schnurr

NEW YORK (Reuters) - Global stocks and the euro rose on Monday on optimism the European Central Bank will provide more help to euro zone nations under pressure from bond markets.

The gains followed a strong finish to last week after robust U.S. jobs data on Friday eased concerns about global growth. Signs over the weekend that Greece had made progress on its debt bailout program also bolstered sentiment.

Investors' nerves were soothed by comments from European Central Bank President Mario Draghi late last week on plans for a new wave of bond purchases aimed at helping to calm the euro zone's turmoil, lately focused on Spain and Italy's high borrowing costs.

"Investors are less pessimistic about the euro zone situation. There is the expectation that something positive will come out of the ECB plan and so investors are more willing to search for risky assets that look attractive," said Aroop Chatterjee, senior currency strategist at Barclays Capital in New York.

Inspectors from the International Monetary Fund, the European Commission and the European Central Bank - known as the troika - concluded a visit to Greece, saying they would return in September to give their final verdict.

They said Greece has made progress in finding budget cuts needed to continue its bailout program but cautioned that more work is needed.

Wall Street rose to a three-month high, though off the day's highs, while European shares closed at their highest level in more than four months and yields on Spanish and Italian bonds fell.

The euro zone's problems remain the focus for many major investors, though tensions remain as details of exactly how the ECB will stabilize the bloc's bond markets have yet to be settled.   Continued...

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange August 6, 2012. REUTERS/Remote/Tobias Schwarz