Text size:

  • Small
  • Normal
  • Large
Stocks markets across the world, including the Nikkei in Japan, were up yesterday following a rescue plan for Spanish banks. Yuriko Nakao / Reuters
Stocks markets across the world, including the Nikkei in Japan, were up yesterday following a rescue plan for Spanish banks. Yuriko Nakao / Reuters

European recovery stopped in its tracks

Market euphoria over Spain's 100 billion banking bailout quickly faded yesterday as concerns about the euro zone re-emerged.

Market euphoria over Spain's 100 billion (Dh461.29bn) banking bailout quickly faded yesterday as concerns about the euro zone re-emerged.

European markets rose to the highest level in four weeks in early trading, with yields on Spain's 10-year bonds plummeting as investors showed relief over a rescue plan for the country's troubled banks.

But markets soon fell from their highs, while yields on Spanish bonds crept up again. Anxiety about the upcoming Greek election was foremost in investors minds, said analysts.

"The rally today is a reflection of the relief that investors are feeling," said Rami Sidani, the Dubai-based head of Middle East and North Africa investments at Schroder Investment Management.

"Spain is a big animal, its economy is much bigger than Greece, and the official filing for help should restore confidence in the banking system which has been suffering massive withdrawals."

In early trading, the Madrid Stock Exchange General Index rallied 3.6 per cent to 690.45 points. The United Kingdom's FTSE 100 Index jumped 1.3 per cent 5,505.79, while Germany's DAX Index gained 2 per cent to 6256.32. The euro rose to the highest level in three weeks, up 1 per cent to $1.26694.

But later in the day, much of these early gains had been wiped away. Investors are looking to Greece's upcoming national on Sunday, regarded as the next market catalyst, to help determine whether the debt-ridden country commits to its austerity measures or leaves the euro zone altogether.

"We might see markets come up and wait for an outcome," said Haissam Arabi, the chief executive at Gulfmena Investments in Dubai.

"If the conservatives win, the Greeks will stick with the bailout plan and austerity measures, which would mean Greece will not be pulling out of the euro - and the euro zone is still not a failure," he added. "The risk is when you have a complete shift in the political agenda."

In the Gulf, the Dubai Financial Market General Index advanced 1 per cent to close at 1,483.00, while the Abu Dhabi Securities Exchange General Index inched up 0.3 per cent to close at 2,463.38.

Saudi Arabia's Tadawul All-Share Index, the biggest and most liquid stock market in the Gulf, rose 0.6 per cent to 6,790.96.

Brent crude futures rose 1 per cent to trade at $100.490 per barrel.

"Gulf bourses will continue to have correlation to global market to the degree that it has on the oil price, which has jumped up and that's what's setting the tone for us, for the budgets for the region and governments being able to continue spending on infrastructure," said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi.

"When global growth is impacted and you see a large slowdown going through, it impacts demand for energy and that's where the link comes in."

In Asia, Hong Kong's Hang Seng Index jumped 2.4 per cent to 18,953.60. Japan's Nikkei Index and Korea's Topix Index rose 1.9 per cent and 1.7 per cent to 8,624.90 and 730.07 respectively.



Back to the top

More articles

Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.


To add your event to The National listings, click here

Get the most from The National