Global shares, euro rebound on hope Cyprus seals a deal
By Herbert Lash
NEW YORK (Reuters) - Global equity markets and the euro rebounded on Friday on hopes Cyprus will avert a financial collapse next week, taking succor from an agreement that shielded Greek banks from the Cypriot crisis.
Wall Street opened higher and European stocks edged higher after Greece and Cyprus said that Greek banks had agreed to buy the local units of stricken Cypriot banks.
The euro rose 0.43 percent to $1.2952 even as Cyprus' increasingly isolated leaders scrambled to strike a bailout deal with the European Union by Monday after Russia rebuffed Cypriot entreaties for aid.
At least three Greek banks including Alpha Bank (ACBr.AT: Quote) and Piraeus (BOPr.AT: Quote) are ready to buy the units of the three Cypriot lenders in Greece, and the country's bank support fund was meeting to pick a buyer, officials told Reuters.
"It seems that investors are expecting a deal before the Monday deadline. So they're not placing new shorts on the euro going into the weekend. They don't want to be caught on the wrong side of the bet in case a deal does materialize," said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut.
"While the market may be vulnerable because it's up so much, the U.S. economy is in a better shape and better position to withstand the whole euro zone and Cyprus situation," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab.
The Dow Jones industrial average .DJI was up 82.13 points, or 0.57 percent, at 14,503.62. The Standard & Poor's 500 Index .SPX was up 9.13 points, or 0.59 percent, at 1,554.93. The Nasdaq Composite Index .IXIC was up 16.00 points, or 0.50 percent, at 3,238.60. Continued...