Europe open: Spain´s Ibex leads gains on short-covering

Date: Friday 29 Jun 2012

-Possible breakthroughs at EU Summit
-Banks deposit €782bn overnight at ECB
-Some German parliamentarians oppose ESM –Bbg

FTSE-100: 1.49%
Dax-30: 2.52%
Cac-40: 2.56%
FTSE-Mibtel: 3.10%
Stoxx 600: 1.77%
Ibex 35: 4.28%

European equities are rising strongly, led by Spain´s Ibex 35, following what may turn out to be a surprise breakthrough at last night´s EU summit. The details of the same, however, have yet to be thrashed out, some possibly today. As well, a raft of macroeconomic data is slated for release in the US this afternoon.

Thus, there is certainly less pessimism in the equity markets today, even if quite a few analysts have been quite cautious in their reactions. Nevertheless, they do seem to concede that at least some real progress seems to have been made.

Of possible interest, the initial reaction in currency markets (in the euro/dollar cross), which is a far deeper market than equities, was a quite a bit less restrained than what can be seen in stocks at the moment.

Even so, there are already some reports of some politicians who are opposed to any deal, such as Wolfgang Bosbach, chairman of the domestic affairs committee in Germany’s lower house of Parliament, or Bundestag. He said the permanent rescue mechanism is a step toward a European transfer union, Rheinische Post reported, citing an interview, Bloomberg reports. For that reason he added that he cannot support it.

From a sector stand-point the best performance can now be seen in the following industrial groups on the DJ Stoxx 600: construction (2.98%), banks (2.84%) and automobiles (2.70%).

Weak German data

Euro and oil bounce back

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