Markets surge amid Spain banks deal

Stock markets surged today after a lifeline worth up to €100bn for Spain’s banks helped ease eurozone tensions.

Stock markets surged today after a lifeline worth up to €100bn for Spain’s banks helped ease eurozone tensions.

The FTSE 100 Index jumped nearly 2% or 100 points, reflecting similar gains in Asia, after the European Union bailout secured vital breathing space for the beleaguered single currency.

The euro climbed 1% against the US dollar while Brent crude oil also lifted back above 100 US dollars a barrel amid hopes of improved global demand.

Financial stocks were among the major beneficiaries in London, with Barclays shares up 5% and insurer Aviva 4% higher. International Airlines Group, which owns British Airways and Spain’s Iberia, also jumped 4%.

Although the situation in the eurozone’s fourth biggest economy remains bleak, there are hopes that the eventual injection of support for its creaking banks will help to avoid the meltdown of the eurozone.

While the planned €100bn in European Union rescue funds has eased some nerves over Spain, further storms lie ahead for the eurozone.

The next key date for the euro currency union is Sunday when Greece holds an election that is being seen as a referendum on whether to stay in the eurozone or reject painful austerity measures.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: “The Spanish announcement is not a solution to the eurozone’s ongoing woes, but it is a statement of intent.

“Despite the fact that details have to date been sketchy on the ultimate resolution of the European crisis, one constant has been a declaration by the authorities that the area will remain intact.

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