Global Markets Rally on Spain Bailout
June 11, 2012 by Douglas A. McIntyre
The hope that a $125 billion bailout of Spain and its banks will create a clean break with Europe’s months of sovereign trouble drove global markets higher. Among others, the Spanish market rose 5%.
To some extent because of pressure the bailout will take off of their own banks, Germany’s Dax rose 2.4% to 6,276. The German economy has started to deteriorate along with the rest of Europe. France’s CAC 40 was up 2% to 3,115. President Hollande did not get what he wanted out of the Spain deal, which was a precedent for stimulus.
The UK’s FTSE 100 rose 1.7% to 5,255. Leaders in the UK have said the troubled economies of Europe will hurt its export prospects. However, Spanish leaders said that the bailout will not keep it from a long period of economic trouble dragged to a large extent by 25% unemployment.
Most of Asia’s markets also rose on the Spain news. The Hang Seng rose 2.3% to 18,919.
The tests for Europe are actually not over. Greek elections occur on Sunday, and voters there could still reject austerity measures by voting for candidates who do not favor them.
Douglas A. McIntyre
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