• European stocks rebound on G8 support for Greece

    LONDON, May 21, 2012 (AFP) – European stock markets mostly rebounded on Monday as G8 support for Greece to remain in the eurozone boosted sentiment after last week’s sharp sell-off, traders said.

    London’s benchmark FTSE 100 index closed up 0.70 percent to 5,304.48 points after tumbling by five percent last week.

    In Frankfurt, the DAX 30 added 0.95 percent to 6,331.04 points and in Paris the CAC 40 gained 0.64 percent to 3,027.15 points.

    In foreign exchange deals, the euro slid to $1.2767 from $1.2773 late in New York on Friday.

    The euro had earlier Friday hit a four-month-low of $1.2642 on deepening worries about the eurozone.

    “After five days of consecutive declines core European markets have rebounded today, though Italian and Spanish markets have underperformed,” said Michael Hewson, senior market analyst at CMC Markets.

    “The gains have been helped by comments from Chinese policymakers that suggested that they could well take measures to help boost growth and boost domestic consumption,” he added.

    Spain on Monday denied that it needed foreign help for its banks, which are staggering under the mass of loans that turned sour after a 2008 property crash, but tasked two global consulting firms, Roland Berger and Oliver Wyman, with valuing their battered balance sheets.

    Economy Minister Luis de Guindos also forecast the Spanish economy would contract this quarter at the 0.3 percent rate it has for the past half year.

    Spanish stocks closed down 0.65 percent.

    With the future of Europe’s single currency union in trouble, leaders of eight of the world’s largest economies called on Greece to stick to the terms of a massive EU-IMF bailout, which is hanging by a thread.

    “We agree on the importance of a strong and cohesive eurozone for global stability and recovery,” a G8 joint communique stated wrapping up a weekend meeting.

    “We affirm our interest in Greece remaining in the eurozone while respecting its commitments.”

    The G8 club of developed nations comprises Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

    Germany and France pledged on Monday to do whatever is necessary to keep Greece in the euro fold, as political turmoil in the debt-wracked country threatens to force it out of the club.

    “We agreed that we have to do everything to keep Greece in the euro club,” said German Finance Minister Wolfgang Schaeuble after the first official meeting with his new French counterpart Pierre Moscovici.

    Schaeuble hosted Moscovici to thrash out a common line for Wednesday’s Brussels summit, after the meeting of G8 leaders left Berlin looking increasingly isolated with its austerity-driven solution to the crisis.

    But Moscovici said France would keep to its plans to bring its budget back into balance by 2017 as markets look for eurozone countries to repair their finances and eventually cut their massive debts.

    US stocks moved higher Monday, with the Dow Jones Industrial Average up 0.65 percent to 12,449.42 points in midday trading.

    The S&P 500-stock index climbed 0.96 percent to 1,307.68 points, while the tech-rich Nasdaq added 1.28 percent to 2,814.31 points.

    However Facebook shares plunged almost 12 percent below their IPO price in early trade Monday, as early buyers sought to cut losses during the stock’s first full day of trade.

    An hour and a half after the market opened, the shares were changing hands at $33.67, a 11.9 percent discount from the $38 initial public offering price, which made Facebook the second largest US IPO of all time.

    Over in the Asia-Pacific region, stock markets ended mostly higher on Monday, also following heavy losses last week on eurozone concerns.

    Tokyo gained 0.26 percent, Sydney rose 0.67 percent and Seoul won 0.94 percent. Hong Kong fell 0.16 percent.

    Global markets have been sent into a spin this month after May 6 polls in Greece and France saw voters overwhelmingly back anti-austerity parties.

    Another election has been called for next month in Greece after several attempts to form a coalition government failed.

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