The huge €750 billion ($NZ1.3 trillion) euro-zone bailout package has sent worldwide stock markets soaring to their biggest one-day gains in more than a year.
EU finance ministers agreed on the support plan for countries facing fiscal challenges. It will consist of up to €440 billion in loans from euro-zone governments and €60 billion from an EU emergency fund, as well as €250 million from the International Monetary Fund.
Asian markets were first to react, rising across the region, while Europe followed with bank stocks leading the way. The news also sent the euro sharply higher against the dollar. Oil prices rose, while gold fell.
On Wall Street, the Dow Jones Industrial Average closed 404.71 points, or 3.9%, higher at 10,785.14, its biggest one-day rise since March 2009.
All compnents advanced, led by a 7.4% gain in Caterpillar and a 6.9% advance in both Bank of America and GE.
Other major market measures reached similar milestones.
The S&P 500-share index rose through the 1150 mark to finish 4.4% up at 1159.73, its biggest jump since March 2009, while the Nasdaq Composite ended 4.8% higher at 2374.67, its first triple-digit advance since October 2008.
All of the S&P’s sectors were in the black, with its industrial, technology and consumer-discretionary sectors leading the recent gains, up more than 4% each.
In Europe, financial stocks put in the strongest performance, with banks most exposed to Greek debt and those in the periphery nations gaining momentum.
Spain's Banco Santander rose 23%, France's Societe Generale and BNP Paribas added 24% and 21%, respectively, while Italy's UniCredit rose 21%. In London, Barclays added 16%, and Lloyds Banking Group advanced 14%.
The pan-European Stoxx 600 Index closed up 7.2% at 254.14. The UK's FTSE 100 Index rose 5.2% to 5387.42, France's CAC-40 Index ended up 9.7% at 3720.29 and Germany's DAX added 5.3% to 6017.91.
The Greek ASE Composite jumped 9.1% to 1779.30., Portugal’s PSI 20 jumped 10.7% to 7335.33 and the Spain IBEX 35 leapt 14.1% to 10,318.7.
In Asia, Japan's Nikkei Stock Average of 225 companies ended up 1.6% at 10,530.70 and Australia's S&P/ASX 200 jumped 2.7% to 4599.78, snapping a five-session losing run.
China's Shanghai Composite overcame volatile trading to finish 0.4% higher at 2698.76. Hong Kong's Hang Seng rallied 2.5% to 20,426.64, extending gains as heavyweight HSBC Holdings surged.
HSBC climbed 5.6%, while Standard Chartered advanced 4.2%. HSBC said on Friday that its US business had made a quarterly pretax profit for the first time in nearly three years because of lower loan-impairment charges.
India's Sensitive Index gained 3.4%, its biggest one-day gain in nearly a year, to end at 17,330.55.
Commodities: Oil up, gold down
Crude-oil futures roared higher after four days of losses. Light, sweet crude oil for June delivery in New York was 2.3%, or $US1.70, higher at $US76.81 a barrel in noon trade.
ICE Brent crude futures for June were up $US1.85 at $US80.12 a barrel, after settling on Friday at the lowest level since March 15.
Gold futures fell as debt tensions eased and reducing its appeal as a safe haven investment.
Most-actively traded gold, for June delivery, was down $US12.40 at $US1198 an ounce in New York.
Currencies: Euro up, yen down
The euro and other growth-sensitive currencies advanced while the yen fell heavily.
Once the news of the euro support package emerged, Asian-based traders sold off the yen and dollar against the euro and UK pound, as well as against higher-yielding regional currencies.
In New York, the euro was at $US1.2767, compared with $US1.2731 late on Friday. The dollar was at ¥93.132 from ¥91.41, while the euro was at ¥119.70 from ¥116.71.
The UK pound was at $US1.4962 from $US1.4821.
Tue, 11 May 2010