* Greek govt expected to win confidence vote late Tuesday
* Euro's gain sparks relief rally, but strength a concern
* Risky assets rise even as safe-haven gold also climbs
* Volumes light as investors reticent to place new trades
(Updates activity and prices)
NEW YORK, June 21 Global stocks jumped and the
euro rose on Tuesday after slipping to three-week lows last
week as investors speculated Greece will avoid a debt default,
making risky assets once again attractive.
Investors bet that Greek Prime Minister George Papandreou
would survive a confidence vote in parliament, a key hurdle
the country must clear to avert a debt default. The vote is
due around 5 p.m. New York time (2100 GMT). For details see
World stocks have tumbled almost 8 percent from three-year
highs set in May as investors worried a disorderly
restructuring of Greek debt would roil global markets and hit
banks in Europe and elsewhere.
Euro-zone finance ministers said the Greek government had
until July 3 to approve new steps to get the next installment
of 110 billion euros in aid from the European Union and
International Monetary Fund.
"All eyes are on the Greek vote of confidence on
Papandreou ... people are still hoping for the best rather
than fearing for the worst," said analyst Leon Westgate at
Standard Bank in London.
WALL ST REACTS TO HOUSING
Data showed U.S. sales of existing homes fell 3.8 percent
in May, less than some had feared, accelerating losses in U.S.
government debt and extending gains on Wall Street.
European shares rose at their fastest pace in two months,
bouncing off three-month closing lows.
The FTSEurofirst 300 index .FTEU3 of top European shares
added 1.4 percent to a provisional close of 1,096.51. The MSCI
world equity index .MIWD00000PUS was up 1.5 percent for the
day. An index of emerging market stocks .MSCIEF rose 1.4
On Wall Street, the Dow Jones industrial average .DJI
was up 102.06 points, or 0.85 percent, at 12,182.44. The
Standard & Poor's 500 Index .SPX was up 15.99 points, or
1.25 percent, at 1,294.35. The Nasdaq Composite Index .IXIC
was up 48.61 points, or 1.85 percent, at 2,678.31.
The Federal Reserve began a two-day meeting that ends on
Wednesday, with Fed watchers preoccupied by the question of an
economy that is slowing while underlying inflationary
pressures builds. [ID:nN1E75I073]
Oil declined at midday, reversing earlier gains in choppy
trading before the expiration of the U.S. July crude contract
at the end of today's session. On Monday, crude had sunk to a
The euro gained against the U.S. dollar. U.S. debt prices
fell ahead of the release of U.S. housing data.
The euro EUR=EBS was up 0.6 percent at $1.43971. In
contrast, the U.S. dollar index .DXY shed 0.5 percent.
Traders said the euro's gain sparked a relief rally,
although many questioned its strength.
"Everything appears to be related to the bounce in the
euro. It's a bit of a relief rally that has triggered some
short covering," Westgate said, referring to a 1 percent
bounce in copper prices.
U.S. light crude for July delivery CLc1 dipped 5 cents,
or 0.05 percent to $93.21 in choppy trading on its expiration
day. ICE Brent LCOc1 for August delivery slipped 75 cents to
Traders said that even if Papandreou's cabinet survives
the confidence vote, the euro's gains would be short-lived as
it would not necessarily guarantee that Greece will be able to
pass new austerity measures on June 28.
"We should see cautious trading ahead of the Greek vote
and if it is passed, euro/dollar should react positively,"
said Roberto Mialich, currency strategist at Unicredit in
Milan, who expected gains to be capped below $1.4450.
"The picture is so uncertain about the euro zone periphery
that it will prevent big investors from taking large
directional positions," Mialich said.
Bond prices fell. The benchmark 10-year note US10YT=RR
slipped 6/32 in price to yield 2.98 percent.
Gold prices rose, lifted by investors still worried about
a possible Greek debt default and financial contagion.
Spot gold XAU= was bid at $1,545.54 a troy ounce.
(Additional reporting by Gertrude Chavez-Dreyfuss, Angela
Moon and Karen Brettell in New York; Ikuko Kurahone and
Pratima Desai; Blaise Robinson in Paris; Writing by Herbert
Lash; Editing by Kenneth Barry and Jan Paschal)