Europe stocks up, euro dips before Greece elections

Europe stocks up, euro dips before Greece elections

European stock markets rose and the euro slipped against the dollar Friday ahead of crucial weekend elections in Greece and after Britain unveiled fresh stimulus measures, boosting bank shares.

Approaching midday in London the FTSE 100 index of leading companies was up 0.44 percent at 5,491.01 points, Frankfurt’s DAX 30 climbed 0.84 percent to 6,190.64 points and in Paris the CAC 40 won 1.38 percent to 3,074.34.

Madrid’s IBEX 35 jumped 1.10 percent.

In foreign exchange deals, the euro dipped to $1.2613 from $1.2630 late Thursday in New York. Sterling steadied against the euro and dollar after initially dropping following the stimulus news.

Asian stock markets meanwhile mostly closed higher Friday on hopes that the US Federal Reserve would embark on a fresh round of economic stimulus and that Greece would return a pro-austerity government in weekend polls, traders said.

However, with Spain’s borrowing costs hitting another record high despite a 100 billion-euro bank bailout, traders remain on edge.

In the United States on Thursday, poor jobs data sparked speculation that the US central bank would start a third round of stimulus known as quantitative easing in a bid to kickstart the world’s biggest economy.

On Wall Street the three main indexes advanced on hopes for more cash flooding into the market. The Dow gained 1.24 percent, the S&P 500 climbed 1.08 percent and the Nasdaq added 0.63 percent.

In Britain finance chief George Osborne and Bank of England governor Mervyn King said they would flood banks with billions of pounds in a bid to jump-start lending to households and businesses and fend off a potential storm from Europe.

But while investors absorbed the possibility of fresh cash in the system Europe’s troubles tempered sentiment.

On Thursday the interest rate on Spanish 10-year government bonds soared to 6.9650 percent, the highest since the birth of the single currency in 1999, and close to the danger-zone 7.0 percent considered unsustainable to service debts.

The jump came after Moody’s on Wednesday slashed Spain’s sovereign debt rating by three notches, saying the bank bailout would put extra strain on the country’s already weak finances.