European stocks are set to open sharply higher on Monday as a narrow election victory of Greece's pro-bailout parties over left-wing rivals in Greek parliamentary polls eased concerns that the beleaguered nation will exit the currency bloc.
New Democracy leader Antonis Samaras declared victory in the election and called parties to join a national salvation government, "as soon as possible." Delivering a victory speech on Sunday night, he said Greeks had voted to stay in the euro, and termed it a victory for "all Europe." He said Greece would honor its obligations to its lenders.
The Eurogroup reiterated its commitment to assist Greece in its adjustment effort in order to address the many challenges the economy is facing.
Commodities such as copper and crude futures are up over a percent each, while the euro lost steam after climbing to a one-month high against the dollar in early Asian deals. Investor focus is now shifting from Greece to the upcoming FOMC meeting on June 19-20 where policymakers may decide whether to extend a program known as Operation Twist that expires this month.
Key benchmark indexes in Australia, China, Hong Kong, Japan and South Korea are up between half a percent and two percent, while India's benchmark Sensex is down a percent, erasing an early gain. The Reserve Bank of India today left its repo rate and CRR unchanged, giving a nasty shock to investors who had expected a 25 basis point cut in repo rate and more liquidity injection to counter sluggish domestic economic growth.
Closer home, asking prices for a property in the United Kingdom rose to a new record high in June, buoyed by strong price movements in London and South East, property website Rightmove said. Prices of new property coming to market stood at GBP 246,235, marking a third consecutive national record. This was 1 percent higher than a month earlier and 2.4 percent above last years' level.
In corporate news, Jetter AG reported financial results for fiscal 2011/12, with net profit for the year climbing to EUR 151 thousand compared to a loss of EUR 114 thousand last year.
French insurer AXA SA's investment arm has raised $7 billion for buyout deals, the Financial Times reported on Sunday. The figure is said to be double the amount originally estimated by AXA and reflects the interest from financial companies to sell off their private equity positions.
European stocks rose on Friday on speculation that major central banks stand ready to take steps to stabilize financial markets if the highly anticipated second round of Greek election results in turmoil.
The Euro Stoxx 50 index of eurozone bluechip stocks rose 1.5 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.7 percent. Around Europe, Switzerland's SMI edged up marginally, the U.K.'s FTSE 100 gained 0.2 percent, the DAX of Germany advanced 1.5 percent and France's CAC 40 climbed 1.8 percent.
U.S. stocks posted strong gains on Friday as separate reports showing an unexpected drop in industrial production in May and a substantial deterioration in consumer sentiment increased the likelihood of further monetary stimulus coming out the Federal Reserve. The Dow rose 0.9 percent, the tech-heavy Nasdaq climbed 1.3 percent and the S&P 500 added a percent.
by RTT Staff Writer
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