SALON

Thursday, Mar 8, 2012 2:00 PM UTC

Markets Confident Of Greek Debt Swap Success

By

Topics: From the Wires,

Markets Confident Of Greek Debt Swap SuccessIn this March 6, 2012 photo, traders work on the floor at the New York Stock Exchange in New York. World stock markets cautiously rebounded Wednesday March 7, 2012 in a week that saw Europe's debt crisis return to center stage over concerns Greece would not attract enough investor support for a deal meant to head off a messy default. (AP Photo/Seth Wenig)(Credit: AP)

LONDON (AP) — Markets were buoyant on Thursday on hopes Greece will get enough support from private investors in a crucial bond swap plan that aims to slash euro107 billion ($140 billion) off its national debt.

Athens is asking private creditors to swap their Greek bonds for new ones with a 53.5 percent lower face value, lower interest rates and longer maturity dates. The hope is that by lowering the amount of debt it has to repay, the country can gradually return to growth.

If not enough investors agree and the bond deal fails, the country could default on its debt in less than two weeks, prompting renewed turmoil in financial markets and knocking confidence in the global economic recovery.

Investors have until 10 p.m. local time (2000 GMT) to sign up, though official results aren’t expected until Friday morning. Only bonds held by private investors are part of the deal, meaning that amounts held by the European Central Bank and other central banks are exempt.

“The markets are in a better mood this morning supported by growing confidence that Greece will be successful this evening in its private sector debt swap,” said Jane Foley, an analyst at Rabobank International.

In Europe, the FTSE 100 index of leading British shares was up 1.2 percent at 5,862 while Germany’s DAX rose 1.7 percent to 6,784. The CAC-40 in France was 1.7 percent higher at 3,450. The euro was also buoyant, trading 0.9 percent higher at $1.3257.

Wall Street is poised for a solid open, too, with both Dow futures and the broader S&P 500 futures up 0.7 percent.

The decisions from the European Central Bank and the Bank of England to hold their rates came as no surprise.

Attention is now centering on what ECB chief Mario Draghi says at his news conference about warnings from Germany’s Bundesbank about the risk the ECB has taken on by loosening rules for collateral on emergency loans to banks.

The ECB is credited with pulling Europe back from the debt crisis brink by offering a total of euro1 trillion ($1.32 trillion) to banks on Dec. 21 and Feb. 29. That eased a looming credit crunch, supported investor confidence, and caused borrowing rates to ease for financially weak countries like Italy and Spain.

Investors will also monitor another round of U.S. economic figures later. Most interest will center on the weekly jobless claims figures in the run-up to Friday’s nonfarm payrolls data for February. The payrolls figures often set the market tone for a week or two after their release — a marked improvement in the U.S. jobs picture in recent months has buoyed hopes over the economic recovery in the U.S. and that’s fed through into the performance of stock markets all round the world.

Earlier in Asia, Japan’s Nikkei 225 index climbed 2 percent to 9,768.96. Hong Kong’s Hang Seng jumped 1.3 percent to 20,900.73 and South Korea’s Kospi edged up 0.9 percent to 2,000.76

In mainland China, the benchmark Shanghai Composite Index rose 1.1 percent to 2,420.28.

Oil markets tracked equities higher — the benchmark New York rate was up 41 cents at $106.57 per barrel in electronic trading on the New York Mercantile Exchange.

____

Kelvin Chan in Hong Kong contributed to this report.

More Pan Pylas.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments are not enabled for this story.

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
Kaitlyn Hunt refuses plea offer, will go to court over high school relationship - The 18-year-old rejected a deal that would have labeled her a sex offender and placed her under house arrest
172 points173 points | 122 comments
vote
Kaitlyn Hunt refuses plea offer, will go to court over high school relationship - The 18-year-old rejected a deal that would have labeled her a sex offender and placed her under house arrest
162 points163 points | 111 comments
vote
Ted Cruz against the world - How the Junior Senator is igniting the GOP civil war
80 points81 points | 21 comments
vote
Anonymous rallies behind Kaitlyn Hunt
22 points23 points | 20 comments
vote
Developers evict historic women’s shelter to build luxury hotel - The 104-yr-old Anna Louise Inn has ended its 2-year legal battle with a Fortune 500 company & will now move. Many view the victory of the insurance company over a community touchstone as a major blow to the city.
17 points18 points | 1 comment

From Around the Web

Presented by Scribol
listener_new_rect The Listener: Chekhov's story mirrors Russia's own

Recommendations