Global sharemarkets rise as debt crisis peaks

Global sharemarkets rose after indications a solution to the European financial crisis is closer.

Stocks on Wall Street rebounded after plunging early in the session on reports from Europe that the crisis was deepening. In overnight developments:

• Moody's downgraded French banks Société Générale and Crédit Agricole, which are heavily exposed to Greek debt.

• The Austrian Parliament was reported to have voted down an upgraded bailout fund but this was denied after it was pointed out the vote only rejected changing the agenda and that the Parliament would hold a special meeting on the bailout fund.

• German Chancellor Angela Merkel and French President Nicolas Sarkozy held a conference call with Greek Prime Minister George Papandreou on moves to narrow Greece's budget deficit, despite the growing public backlash there against austerity measures that are blamed for causing a worsening economic slump.

• Chancellor Merkel rejected speculation that Greece was nearing bankruptcy, suggestions that had been fuelled by German politicians,

• European Commission President José Manuel Barroso said the commission would soon present options for the introduction of a common bond for the euro area, and France said it would do all it takes to save Greece from default.

On Wall Street, which is transfixed by the euro crisis, the Dow Jones Industrial Average was up 140.88 points, or 1.3%, to 11,246.73 at the close (8am NZ time). The S&P 500 index gained 1.35% to 1188.68, while the technology-oriented Nasdaq Composite advanced 1.45% to 2572.75.

Technology stocks were the best performers. Cisco Systems rose 9% after offering a more modest but realistic goal for future revenue, predicting annual growth over the next three years of 5-7%.

Consumer staples also were strong, with Home Depot up 2% to lead the Dow gainers and Wal-Mart Stores gaining 1%.

Other markets: Europe rebounds, Asia mixed
European stock markets finished higher on hopes of progress in tackling the euro-zone debt crisis. The calmer tone helped the benchmark Stoxx Europe 600 index to end up 1.5% at 224.17.

The UK's FTSE 100 index closed up 1.0% at 5227.02, while France's CAC-40 index closed 1.9% higher at 2949.14 and Germany's DAX index closed up 3.4% at 5340.19.

Asian markets ended off their lows caused by earlier reports from Europe. Hong Kong's Hang Seng index recovered enough ground to push it into positive territory for the day, up 0.1% at 19,045.44.

Japan's Nikkei Stock Average lost 1.1% to 8518.57 and Australia's S&P/ASX 200 index lost 1.6% to 4005.8. Korea's Kospi dropped 3.5% to 1749.16 in investors' first chance to react to recent events following a long holiday weekend.

China's Shanghai Composite rose 0.6% to 2484.83, while India's Sensex gained 1.5% to 16709.60.

Commodities: Oil, gold down
Oil futures fell as traders looked past a sharp decline in US crude stockpiles last week to focus on rising stocks of fuel products.

After trading at low as $US88.83 a barrel before the weekly inventory report was released. Light, sweet crude oil for October delivery settled at $US88.91, down $US1.30, or 1.4%%, in New York. North Sea Brent rose 51USc, or 0.5%, to settle at $US111.94 a barrel.

Gold futures eased as hopes for progress on Europe's debt crisis left uncertain demand. The contract for September delivery was down $US3.30, or 0.2%. to $USUS1823.50 an ounce in New York.

Currencies: Euro surges on debt assurances
The euro surged to session highs on signals from European leaders that they were fully supportive of Greece's continued participation in the euro zone.

The euro reached a high point of $US1.3778 from $US1.3677 late on Tuesday in New York. It also hit its day's high of ¥105.58 from ¥105.21.

The US dollar was at ¥76.81 compared with ¥76.97, while the euro was at ¥105.35 against ¥105.2.

The UK pound was trading at $US1.5794 compared with its close of $US1.5778 on Tuesday.