Stock markets up after G8 summit

Stock markets up after G8 summit

Assurances that world powers want debt-laden Greece to remain in the euro helped support world stock markets today after sharp losses over the past week.

A weekend summit of leaders of the world’s major developed economies in Washington provided little in the way of tangible results for investors already nervous about slowing growth in China and the US.

But leaders of the G8 countries issued a statement affirming their desire for Greece to remain a part of the euro currency union and calling for growth-promoting measures as well as austerity moves.

Analysts said the tone helped calm markets, which were rattled last week after Greek voters rejected austerity policies that are a condition for the country continuing to receive international bailout money. Without the bailouts, Greece would default on its debts and probably abandon the euro common currency.

Germany’s DAX rose 0.7% to 6,311.68 and France’s CAC-40 added 0.9% to 3,033.95. Britain’s FTSE 100 fell 0.8% to 5,296.58.

US stock futures augured a higher open for Wall Street. Dow Jones industrial futures climbed 0.7% to 12,417 and S&P 500 futures gained 0.7% to 1,300.30.

Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong, said “the panic seen at the end of last week has abated”.

He said the next major market-moving event was likely to be on June 17, when Greeks again try to elect a new government.

“I think the focus is on the Greek election. I doubt anything will happen before that will force Greece’s hand one way or the other,” he said.

In any event, sharp selling among key Asian indexes last week presented bargain-hunting opportunities. Japan’s Nikkei 225 index rose 0.3% to close at 8,633.89. Mitsubishi Motors rose 1.4% and Camera and medical equipment maker Olympus rose 1.5%.

Australia’s S&P/ASX jumped 0.7% to 4,073.60 as improving commodities prices helped its sizeable resource sector. Energy Resources of Australia jumped 3% and BHP Billiton, the world’s largest mining company, added 2%.

Mainland China’s Shanghai Composite Index was 0.2% higher at 2,348.30. Benchmarks in Taiwan, Singapore and India also rose.

But Hong Kong’s Hang Seng was down 0.2% at 18,922.32. Indonesia, Thailand and New Zealand benchmarks also fell.

Shares of Hong Kong-listed Alibaba.com rose 0.2% a day after Yahoo announced it is to sell back half of its 40% stake in the Chinese e-commerce group. Rising gold prices helped boost Hong Kong-listed Zijin Mining Group 3.3%.

Benchmark oil for June delivery was up 51 cents to 91.99 dollars a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 1.08 dollars to settle at 91.48 dollars in New York on Friday.

In currency trading, the euro rose to 1.2764 dollars from 1.2737 dollars late on Friday in New York. The dollar rose to 79.40 yen from 79.08 yen.

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