European Stocks Rise Greek Rescue Plan Pushed

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European Stocks Rise Greek Rescue Plan Pushed

Wednesday, 17 March 2010 09:05

London - European Investors responded positively to a European Union plan to save Greece from the failure, sending the stock price ran up on Tuesday.
But analysts said trading was tentative as the market waited for the U.S. interest rate statement and the economic outlook from the Federal Reserve.

In London the FTSE 100 index added 0.48 per cent to close at 5620.43 points while in Paris the CAC 40 rose 1.23 percent to 3938.95. The Frankfurt Dax index rose 1.14 percent to 5970.99 points.

Elsewhere there is rising 0.87 percent in Brussels, 1.10 percent in Milan, 0.72 percent in Zurich, 0.93 percent in Madrid and 1.24 percent in Amsterdam.

"Good news in Greece clearly pushing the market higher," said Wilfried Beau from Meeschaert Gestion Privee.

Rating agency Standard & Poor `s said it defend Greece's credit rating because of increases in threats in note (debt) short-term decline.

Institutions said Tuesday that the Greek government budget savings - are trying to cut the public deficit this year of four percentage points from 12.7 percent of national GDP - was "appropriate" to achieve fiscal targets in 2010.

"We saw the government's fiscal consolidation program to support the rating at current levels, then we affirmed the ratings," credit analyst Standard & Poor `s Mrsnik Marko said in a statement.

But S & P said it projected four percent economic contraction in Greece this year, which will force the Socialist government to implement more spending cuts.

Earlier in Brussels of EU finance ministers backed a eurozone plan to provide emergency loans to Greece - if necessary - to protect the country from bankruptcy.

The aim is to convince the financial markets of Greece's financial solvency, allowing Athens to borrow money at rates comparable with other euro zone members. At the same time Greece had to pay high interest to raise money to cover the huge debt obligations.

U.S. stocks soar in cautious trading Tuesday ahead of interest rate policy decisions of the Federal Reserve is widely expected to remain at record low.

Dow Jones Industrial Average rose 0.21 percent to 10,664.07 in mid-day while the Nasdaq composite added 0.43 percent to reach 2372.74.

Shares were "walking carefully before the Federal Reserve monetary policy decision announced in the afternoon," said analysts at Charles Schwab & Company in a note to clients.

Federal Open Market Committee (FOMC), units of Fed policy makers, is expected to maintain the federal funds rate - which affects every level of bank borrowing costs to each other - which has never happened before in the range of zero to 0.25 per cent to help the recovery economy from the worst financial crisis in decades, analysts said.

"The FOMC is expected to maintain the target range for the federal funds rate has not changed ... but the market will be hyper-attention to the words of the directive," said Patrick O'Hare from Briefing.com.

"In particular, the market will be watching to see whether the Fed menghilangkanfrase` period `is used in connection with the interest rate is very low federal funds and how the features of the condition of economic recovery," he said. | antaranews.com |