WSJ:European Stocks, Euro Welcome EU Summit Package
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Europe's financial markets are opening with a strongly positive response to the package agreed at the EU summit.
European stocks are expected to open higher, the euro is firm against all the other major currencies and German bund futures are sharply lower. Crude oil and gold prices are steady.
"The much-anticipated summit of European leaders ended with further progress in tackling the euro area crisis, but it remains a deal long on intentions and short on details," said Jens Larsen, chief European economist at RBC Europe.
"On the positive side, the euro area leaders have confirmed their commitment to finding a sustainable solution that leads toward further fiscal integration."
Ahead of the open, IG Markets called London's FTSE 100 index up 94 at 5647, the DAX in Frankfurt up 131 at 6147, and the CAC-40 in Paris up 82 at 3252.
In the foreign exchanges, the euro climbed against the dollar, yen, sterling and the Swiss franc. At 0615 GMT it was quoted at $1.4008, up from $1.3906 in late New York trading Wednesday.
By contrast, the December German bund future was down 1.65 at 133.97. December Brent crude was up $1.58 at $110.49 a barrel and spot gold was up $3.00 at $1724.10 an ounce.
"After a long night of further negotiations, the EU summit presented a comprehensive set of actions that--in the next six months or so--might help to prevent a wide-spread contagion and a collapse of the financial markets. The plan still lacks full details on some of the most important medium-term issues (i.e. growth-boosting measures) but it still looks moderately positive in the direction of tackling short-term problems," said Annalisa Piazza at Newedge Strategy.
The immediate risk of a disorderly outcome in Greece is lower, said Larsen. "The combination of a stronger EFSF and a package to strengthen the European banking sector will reduce the risk of a sharp, longer-lasting macro economic contraction. But until we know how the mechanisms will work, it will be hard to judge whether this will be sufficient to entice investors to provide support to European governments," he added.
-By Martin Essex, Dow Jones Newswires; +44-20-7842-9464; martin.essex@dowjones.com
