ET:European stocks bounce on hopes for euro zone action
SINGAPORE: European stock index futures rose sharply on Tuesday, after Asian shares rebounded from multi-month lows and as the euro clung to gains on hopes that euro zone officials will act to corral Greece's debt woes and prevent a financial meltdown.
Financial stocks and global miners were among the biggest gainers in Asia, although some market players cautioned against undue optimism that European leaders were finally getting to grips with a protracted solvency and liquidity crisis.
"It's a knee-jerk reaction to the world failing to come to an end last night," said Richard Morrow, director at Melbourne-based private client stockbroker E.L. & C. Baillieu. "It is a reversal and I don't see it lasting. The market has been as gloomy as I can remember since the last days of 2008."
After three sessions of steepening falls and wild swings on commodities markets, oil, copper, gold and silver all rose. US crude jumped nearly $2 a barrel.
The dollar, US Treasuries and Japanese government bonds, currently safe haven assets of choice, all eased.
Euro STOXX 50 index futures futures rose 2.7 per cent. Futures for Germany's DAX and France's CAC-40 also rose more than 2.5 per cent, while financial spreadbetters called the FTSE 100 to open up as much as 2.2 per cent.
Turbulence on global markets since late July has been driven by investors' twin fears of renewed recession in the United States, and the chaos that Europe's sovereign debt crisis could inflict on the financial system if it continues unchecked.
European Central Bank policymakers said on Monday that officials were working to increase the firepower of the region's rescue fund in their latest effort to staunch a crisis that US President Barack Obama said was "scaring the world".
US markets reacted positively, finishing more than 2 per cent higher on Monday , and the mood continued in Asia, where Tokyo's Nikkei rose 2.8 per cent, coming off its lowest close in more than two years.
S&P 500 index futures rose 0.4 per cent. MSCI's broadest index of Asia Pacific shares outside Japan rose 4.5 per cent, after plumbing its lowest level in 16 months on Monday. The index is down 26 per cent from its 2011 high in April.
