S&P breaches 1,400 as global markets stay upbeat

Topics: From the Wires,

LONDON (AP) — The S&P 500 index breached the 1,400 level for the first time since May as financial markets around the world retained their optimistic tone on Tuesday.

Investors have been buoyant for much of the past couple of weeks, largely on hopes the European Central Bank will play a more pivotal role in Europe’s debt crisis. Last Friday’s figures showing the U.S. economy generated a greater than anticipated 163,000 jobs in July have also helped lift the mood.

Allegations that British-based bank Standard Chartered was colluding with Iran has hit its share price hard — losing a quarter of its value at one stage before recovering a little to trade 18 percent lower in afternoon trading.

The bank’s problems had a knock-on effect on London’s main FTSE 100 stock index, which was flat at 5,808. Standard Chartered makes up 1.5 per cent of the index’s overall market value.

However, the spillover effect has been minimal. Germany’s DAX was up 0.5 percent at 6,955 while the CAC-40 in France rose 1.1 percent to 3,450. Madrid’s IBEX stock index has also enjoyed a solid run of late and was trading another 2 percent higher.

The march higher has been largely due to hopes the ECB will soon start buying the bonds of Spain and Italy and a hint from Spanish Prime Minister Mariano Rajoy that he could request a financial bailout for his country have also added to the prevailing positive tone.

“Global markets were generally higher as investors betted the ECB will now finally step in and confirm a more meticulous bond buyback program for eurozone nations, particularly for Spain,” said Shavaz Dhalia, a financial trader at Spreadex.

Spain has seen the yield on its benchmark 10-year bonds fall below the 7 percent level considered unsustainable in the long-run. It was down another 0.05 percentage points at 6.66 percent.

And the euro has pushed above $1.2436 after another 0.4 percent gain Tuesday.

In the U.S., the Dow Jones industrial average was up 0.4 percent at 13,169 while the broader S&P 500 index rose 0.5 percent at 1,401.

Earlier, most Asian markets eked out gains, with Japan’s Nikkei 225 index rising 0.9 percent to close at 8,803.31. Hong Kong’s Hang Seng added 0.4 percent to 20,072.55. South Korea’s Kospi rose 0.1 percent to 1,886.80.



Mainland Chinese shares also rose. The Shanghai Composite Index gained 0.1 percent to 2,157.62. The smaller Shenzhen Composite Index gained 0.8 percent to 898.48.

Hopes that China’s central bank was preparing to announce steps to spur growth in the world’s No. 2 economy also helped boost confidence in stocks. A weekend statement by the People’s Bank of China was interpreted as a sign that more monetary easing was in store.

Oil prices eked out modest gains alongside equities, with benchmark crude for September delivery up 72 cents to $92.92 a barrel in electronic trading on the New York Mercantile Exchange.

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