- Title: GERMANY: DAX opens with gains of around 0.3 percent
- Date: 22nd May 2012
- Summary: SLATE INFORMATION
- Embargoed: 6th June 2012 13:00
- Location: Germany
- Country: Germany
- Topics: Business,Finance
- Reuters ID: LVA4KYE3PTUVIEHMO47FK9WMG80D
- Aspect Ratio:
- Story Text: Markets recovered some ground on Monday (May 21) on value hunting after last week's heavy losses, but investors remained wary over the euro zone despite world leaders calling for Greece to stay in the monetary union and for Europe to balance austerity with growth.
"We have some hope, we have some danger" said Robert Halver, a trader with Baader Bank, in Frankfurt. "I guess hope will be the Chinese policy of generating more economic growth. That was very helpful for the German economy, definitely, the German industry. But on the other side, we still have the big picture, a bad picture concerning the European crisis and eurobonds."
Leaders of G8 major industrialised nations meeting at the weekend vowed to take steps to combat financial turmoil and revitalise a global economy threatened by Europe's debt crisis, but they offered no specific prescription for debt-crippled Greece which holds fresh elections on June 17. The G8 suggested mounting global support for highly indebted euro zone economies to be allowed to take less strict austerity measures and put more priority on stimulating growth. Reports also suggested Greece's anti-austerity forces could soften their stance to avoid a catastrophic outcome for the nation.
A European summit on May 23 summit will focus attention on whether European leaders can strike a new balance between growth and the fiscal reforms deemed vital to fixing the euro zone's debt crisis and regaining market confidence in the single currency. French President Francois Hollande said on Saturday he would make proposals for eurobonds at the May 23 informal meeting. "Eurobonds are a wonderful thing at the end of this European integration process but not at the beginning," Halver said.
Currently, many market players see the main scenario as Greece staying in the euro and European leaders making some compromises to maintain financial lifelines for the country. But deepening banking sector instability in Spain heightened concerns about contagion from Greek political turmoil, keeping investors' risk-aversion intact at least until the Greek election makes clear whether the nation will stay or leave the euro, traders and analysts said.
The euro inched up 0.1 percent to $1.2793 moving away from a four-month low of $1.2642 reached on Friday, which was not far from its trough of 2012.
With a steadying euro, spot gold added 0.4 percent to $1,598.46 an ounce, after rising more than 1 percent on Friday.
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