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GLOBAL MARKETS-Shares, euro rebound on hope Cyprus reaches deal
March 22, 2013 / 3:26 PM / 5 years ago

GLOBAL MARKETS-Shares, euro rebound on hope Cyprus reaches deal

* Wall Street, Europe rebound as concerns about Cyprus ease

* Euro recovers on investor optimism about a Cyprus deal

* Oil holds above $107 as Cyprus bailout deadline nears

* Bond prices fall as Cyprus talks continue

By Herbert Lash

NEW YORK, March 22 (Reuters) - Global equity markets and the euro rebounded on Friday on hopes Cyprus will avert a financial collapse next week, taking succor from an agreement that shielded Greek banks from the Cypriot crisis.

Wall Street opened higher and stocks in Europe rebounded after Greece and Cyprus said that Greek banks had agreed to buy the local units of stricken Cypriot banks.

The euro rose 0.6 percent to $1.2976 even as Cyprus’ increasingly isolated leaders scrambled to strike a bailout deal with the European Union by Monday, after Russia rebuffed Cypriot entreaties for aid.

At least three Greek banks, including Alpha Bank and Piraeus, are ready to buy the units of the three Cypriot lenders in Greece, and the country’s bank support fund was meeting to pick a buyer, officials told Reuters.

“It seems that investors are expecting a deal before the Monday deadline. So they’re not placing new shorts on the euro going into the weekend. They don’t want to be caught on the wrong side of the bet in case a deal does materialize,” said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut.

Wall Street was lifted by retail stocks, the day’s top gainers, on upbeat outlooks and results from Tiffany & Co and Nike Inc.

“While the market may be vulnerable because it’s up so much, the U.S. economy is in a better shape and better position to withstand the whole euro zone and Cyprus situation,” said Randy Frederick, managing director of active trading and derivatives at Charles Schwab.

The Dow Jones industrial average was up 75.11 points, or 0.52 percent, at 14,496.60. The Standard & Poor’s 500 Index was up 8.76 points, or 0.57 percent, at 1,554.56. The Nasdaq Composite Index was up 13.31 points, or 0.41 percent, at 3,235.91.

The pan-European FTSEurofirst 300 was up 0.04 percent at 1190.95.

MSCI’s all-country world equity index gained 0.17 at 358.42.

Oil prices rose above $107 a barrel. Brent crude for May delivery was up 18 cents at $107.65 a barrel. U.S. crude for May was at $93.02, up 57 cents a barrel.

The benchmark 10-year U.S. Treasury note was down 3/32 in price to yield 1.9233 percent.

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