Friday, September 28, 2012

European stock market rose september 28 2012

European stock market rose september 28 2012 : European shares and the euro rose alongside commodities and other risk assets on Friday, as financial markets welcomed Spain's spending cuts and attention turned to an assessment of its troubled banks and French budget plans.

Markets were buoyed by expectations that the tough Spanish budget is a prelude to an EU aid programme that will allow the European Central Bank to try to reduce its high borrowing costs by buying its bonds.

The optimism about the Spanish government was not universally shared. "They are making the right noises, but whether they can actually put these things into practice is a different matter in a country with no growth and 25 percent unemployment," one London-based bond trader said.

"I'm going to remain sceptical, but the market has given them the benefit of the doubt."

The FTSEurofirst 300 index of top European shares opened 0.3 percent higher as London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX began the day up roughly 0.2 percent.

The euro, which has fallen more than 1.6 percent again the dollar in the last two weeks as progress in tackling the euro zone crisis has slowed, was up 0.1 percent on the day with the dollar also on the defensive against other leading currencies.

Brent oil prices edged up 0.6 percent to $116.66 and London copper rose 1 percent to $8,264 a tonne. Spot gold hovered at a one-week high of $1,778.99 an ounce, leaving it on course for a sixth straight week of gains.

Bund futures, seen as a safe haven asset, were 14 ticks lower at 141.43.

The results of an independent audit of Spanish banks will be published later in the day and Moody's Investors Service is expected to finish its rating review on the sovereign, which may lose its investment grade status.

French President Francois Hollande puts his fiscal credibility on the line on Friday when he delivers the country's toughest budget in 30 years. His first annual budget, to be presented to the cabinet mid-morning, must make 30 billion euros ($39 billion) in savings to keep deficit-cutting promises.

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