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Shares, euro rise on hope Cyprus reaches deal
March 22, 2013 / 12:31 AM / 5 years ago

Shares, euro rise on hope Cyprus reaches deal

NEW YORK (Reuters) - Global equity markets and the euro advanced on Friday on hopes Cyprus will avert a financial collapse, taking succor from an agreement that shielded Greek banks from the Cypriot crisis and remarks that the island nation was hours away from a bailout.

U.S. rose and European shares rebounded after Greece’s Piraeus Bank (BOPr.AT) agreed to take over the Greek branches of Cyprus’s troubled banks in a deal that allows the country to shrink its bloated banking sector.

The deal involved the transfer of 17 billion euros of loans and 14 billion euros of deposits, a source close to the matter said.

The deputy leader of the ruling party in Cyprus later said that the country was close to a compromise that would let its parliament reverse the rejection of a rescue package offered by euro zone partners a week ago.

Finance ministers of the 17-nation euro zone will hold talks on Sunday on the bailout crisis in Cyprus, two euro zone sources told Reuters.

The euro rose 0.74 percent to $1.2992 in its first weekly gain in seven weeks on hopes Cyprus had averted a financial meltdown.

“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.

Traders work on the floor at the New York Stock Exchange, March 18, 2013. REUTERS/Brendan McDermid

Wall Street was lifted by retail stocks, the day’s top gainers, on better-than-expected results from Nike Inc (NKE.N). Nike shares rose 11.1 percent to $59.53.

“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 .DJI closed up 90.54 points, or 0.63 percent, at 14,512.03. The Standard & Poor's 500 Index .SPX was up 11.09 points, or 0.72 percent, at 1,556.89. The Nasdaq Composite Index .IXIC was up 22.40 points, or 0.70 percent, at 3,245.00.

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For the week, the Dow was flat, the S&P was off 0.2 percent and the Nasdaq fell 0.1 percent.

MSCI’s all-country world equity index .MIWD00000PUS gained 0.28 at 358.79.

In Europe, the pan-European FTSEurofirst 300 .FTEU3 of leading regional shares retreated to close down 0.1 percent at 1189.44.

Oil prices rose above $107 a barrel. Brent crude for May delivery rose 19 cents to settle at $107.67 a barrel. U.S. crude for May settled up $1.26 at $93.71 a barrel.

The benchmark 10-year U.S. Treasury note fell 5/32 in price to yield 1.9302 percent.

Additional reporting by Marc Jones in London; Editing by Chizu Nomiyama, Bernadette Baum and Nick Zieminski

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