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 Sentiment was also lifted by expectations that Greece could avoid
destabilizing snap elections after Greece's Prime Minister Antonis
Samaras made a surprise offer to bring pro-European independents
into the government if they backed his choice for new president.
Asian markets had set the tone with gains of 1 percent as they
followed on from Wall Street's strong finish to last week and
European bourses were just as buoyant.
Britain's blue-chip FTSE 100 index <.FTSE> advanced by 0.7 percent,
Germany's DAX <.GDAXI> by 1 percent and France's CAC <.FCHI> rose
0.92 percent to leave MSCI's 45-country All World index
<.MIWD00000PUS> up 0.35 percent.
"Overall the concerns (about the plunge in oil prices, Russia and
Greece) are fading into the background a bit," said head of equity
strategy at ABN Amro, Sybren Brouwer.
"The market recovery is pretty sharp and sharper in Europe than
other markets."
Wall Street was expected to rise further and oil prices were also
holding up as consensus spread that prices were unlikely to take
another tumble for the rest of the year. [O/R]
Brent <LCOc1> jumped as much 2 percent but had lost steam and
slipped back towards $61 a barrel ahead of U.S. trading. U.S. crude
<CLc1> had also stalled at just under $57 a barrel but like Brent is
up roughly 5 percent up from last week's more than five-year lows.
[O/R]
That helped the commodity currencies such as the ruble <RUB=>, which
continued its rebound with another 5 percent jump as the Australian
<AUD=D4> and Canadian <CAD=> dollars also gained ground. [FRX/]
Stocks in Moscow were also flying, with the dollar-traded <.IRTS> up
almost 7 percent following news that oil firm Rosneft had paid
around $7 billion due on loan from a syndicate of international
banks, ending concerns that it would not.
"There was never a question that Russia would stand behind the big
state-owned banks, so it is all about the stabilization in the oil
price really," said Viktor Szabo, a portfolio manager at Aberdeen
Asset Management."
GREECE
The euro <EUR=>, meanwhile, bounced back from two-year lows against
the dollar, with Greece's presidential election and a batch of U.S.
data on Tuesday the chief risks to a calmer holiday mood.
Over the weekend, Belgium's Luc Coene became the latest European
Central Bank policymaker to back outright government bond buying to
stimulate the euro zone. The bank's vice president also warned of a
temporary stint of deflation.
[to top of second column] |
"We now expect a negative inflation rate in the coming months and
that is something that every central bank has to look at very
closely," Vitor Constancio said.
The dollar index <.DXY>, which tracks the U.S. unit against a basket
of six rival currencies, inched down about 0.15 percent to 89.474,
but was still within sight of a near nine-year peak of 89.645 set on
Friday.
Against the yen, however, the dollar was up at 119.77 <JPY=>, though
it was still well away from a 7-1/2 year high of 121.86 touched this
month.
In Europe's bond market, expectations that Greece can avoid another
damaging political episode also pushed down Greek yields. Ten-year
bonds dipped 11 basis points to 8.32 percent, while five-year
equivalents dipped 30 bps to 8.55 percent. <0#GRTSY>
Greece's government only managed to muster 160 out of the 200 votes
needed to seat its new candidate in the first round of presidential
voting last week, but it hopes a coalition of pro-European
independents could give it a chance of winning in a final attempt on
Dec. 29 where it only needs 180 votes.
If it fails, the worry for markets is that it will start a chain of
events that ends with the anti-bailout Syriza party in power, which
would revive concern that Greece may exit the euro.
ABN Amro's Brouwer said the current government joining forces with
pro-European independents "would definitely be a good thing."
"I don't think it (Greek worry) was the major reason for the recent
correction that we saw but it certainly added to some of the other
concerns."
(Additional reporting by Lisa Twaronite in Tokyo; Editing by Toby
Chopra and Louise Heavens)
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