Europe rise continues with finance; Investors look forward to Greece
Investors await a key vote for Silvio Berlusconi in Parliament. Italian rates continue to surge in the bond market. Financial stocks led the rise in Europe.
European shares move sharply higher on Tuesday, November 8. The places of the continent remain dominated by politics and the budget vote of Italy is one of the key events for the markets on Tuesday.
“Political discussions in Rome and Athens will be very closely monitored by investors in the coming hours. Markets should once again show great volatility, “warns, however, the broker IG Markets in its daily note.
At 2:45 p.m., in Paris, the CAC 40 rose 2.20% to 3172 points. Frankfurt gained 2.2% and 1.5% in London. The Milan Stock Exchange ahead of 2, 4% and 1.2% in Madrid.
The banking and insurance leads on the rise. In Paris, Societe Generale offers 8.6% after the publication of its quarterly results .ING in Amsterdam is 7.3%, Lloyds Banking Group 7.8% in London, after reiterating its forecast margin for 2011.
A Wall Street futures on the Dow Jones and Nasdaq gaining 0.5% to 0.8%, omen, for the moment, of opening up slightly. No survey indicator is released on Tuesday.
Traders await the outcome of a first test vote for Silvio Berlusconi under 15.30, which will focus on the approval by the Chamber of Deputies 2010 balance sheet of the state. The Italian prime minister will then undergo in the days to come to a vote of confidence in the Senate on anti-crisis measures promised in late October to the European Union.
“In any case, the procedural event is [...], but the whole point is whether Berlusconi will manage to retain the majority among the 630 elected to the House,” said Jim Reid, a strategist at Deutsche Bank. Monday, rumors of the resignation of Italian Prime-denied-pushed the Milan Stock Exchange. ”A failure of the budget vote would be a strong signal to a failed vote of confidence in the government next week,” say analysts at Credit Agricole cited by AFP.
Italy risks being drawn into the spiral of the crisis. In the morning, the yield on 10-year bond was propelled to a new record since the introduction of the euro area. Shortly after 9am, the sovereign debt of the country and exchanged at a rate of 6.73%, a level unsustainable in the long run. At 2:45 p.m., it is 6.59%.
Italian government bonds have entered a danger zone. ”The evolution of performance is worrying because it is similar to what happened in Greece, Ireland and Portugal. ”Said Alessandro Giansanti at ING Bank.According to the Bank of Italy, Italy and Spain depend on foreign investors to 42% of their sovereign debt.Italy must repay 198 billion euros of bonds in 2012, so that is about 83 billion hands ‘foreign’. ”
Investors await news about Greece
Market participants also follow closely the negotiations working in Greece for the establishment of a transitional government of broad coalition, and await the appointment of a new prime minister.
The current government leader George Papandreou said during an extraordinary cabinet meeting, that the choice of the next prime minister should be stopped by Tuesday night. During the emergency meeting, he asked members of his government to be ready to resign, according to the Greek news agency Ana.
The European Union has invited Athens to write a letter committing to the implementation of the European rescue plan signed by the outgoing prime minister and his successor, Finance Minister, the leader of the opposition and the Governor of the Bank Central, a minister said to the press.
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