June 30, 2011 / 9:17 PM / 6 years ago

GLOBAL MARKETS-Stocks, euro rally on Greece austerity vote

* Greece passes final austerity measures to secure funding

* US Midwest activity jumps, further boosting stocks

* Treasuries prices fall on Greece relief, end of QE2 (Updates U.S. markets close)

By Edward Krudy and Walter Brandimarte

NEW YORK, June 30 (Reuters) - World stocks rose to a one-month high and the euro closed out a second straight quarter of gains against the dollar on Thursday as Greece approved the final austerity measures needed to secure international funding and avert imminent bankruptcy.

An unexpected jump in business activity in the U.S. Midwest eased recent fears of an economic slowdown, helping drive U.S. equities to their biggest four-day rally since September and reducing investors’ appetite for safe-haven U.S. government bonds on the last day of the quarter. For details, see [ID:nN9E7HG00J]

Prices of U.S. Treasury bonds fell for a fourth straight day as the Federal Reserve ended its $600 billion bond-buying program to stimulate the economy.

In Asia, stocks were poised to open higher, with Nikkei futures traded in Chicago NKU1 rising 0.3 percent.

“Fear of an imminent euro collapse has been put to bed, and anyone who has been on the sidelines can come back in,” said Douglas Borthwick, managing director at Faros Trading in Stamford, Connecticut.

The Greek Parliament approved on Thursday detailed austerity and privatization bills required by the European Union and the International Monetary Fund in exchange for emergency funding. [ID:nL6E7HU0SS]

The price of copper, a key industrial metal, ended at a two-month high as appetite for risk rose. Three-month copper CMCU3 on the London Metal Exchange closed at $9,430 a tonne -- its highest price since the end of April.

Goldman Sachs said in a research note it expects the recent selloff in commodities to reverse, with many raw materials breaching their recent highs in the next 12 months. It sees Brent crude oil reaching $130 a barrel in 12 months.

In equity markets, the MSCI All-Country World Index .MIWD00000PUS climbed 1.3 percent to its highest level since June 2.

Major Wall Street stock indexes gained in an end-of-quarter rally, with expectations the rally will be extended in July.

The Dow Jones industrial average .DJI ended higher 152.92 points, or 1.25 percent, at 12,414.34. The Standard & Poor's 500 Index .SPX rose 13.23 points, or 1.01 percent, to 1,320.64. The Nasdaq Composite Index .IXIC gained 33.03 points, or 1.21 percent, to 2,773.52.

“The resolution in Greece allows us to throw away one more question mark, and as we do that we become more confident,” said Peter Andersen, portfolio manager at Congress Asset Management in Boston.

    “Managers are also using the occasion to trim their cash positions at the midway point through the year, meaning we’ll start July 1 with optimism.”

    For the second quarter, however, most indexes ended lower -- the S&P 500 fell 0.4 percent and the Nasdaq slipped 0.3 percent. The Dow, however, rose, gaining up 0.8 percent.

    In Europe, the FTSEurofirst 300 index .FTEU3 of top shares rose closed 1.1 percent higher. The STOXX Europe 600 banking index .SX7P jumped 2 percent.

    The euro EUR= jumped 0.5 percent to 1.4498. It gained 2.3 percent against the dollar in the past three months, in its second consecutive quarterly gain against the greenback. It is up 8.4 percent versus the dollar so far this year.

    “There has been less demand for euros lately, given all the uncertainty. But this brings some certainty back to the market -- at least for the next year -- and the euro should rally considerably,” said Borthwick.

    Expectations of another euro-zone rate rise next week, bolstered by comments from European Central Bank President Jean-Claude Trichet, also supported the euro.

    The weaker dollar earlier helped push up oil prices.

    U.S. crude oil CLc1 rose 0.69 percent to $95.42 per barrel. It ended the quarter with losses of 10.6 percent, though, the largest since the fourth quarter of 2008.

    Brent crude LCOc1 closed at $112.48 per barrel, up 8 cents on the day but down 4.9 percent for the quarter. (Additional reporting by Brian Gorman, Emily Flitter, Nick Olivari; Editing by Leslie Adler)

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