Thursday, November 10, 2011

Global shares edge up on Italy, Greece hopes

US stocks bounced back at the open after their worst day in three months as Italian bond yields came off levels seen as unsustainable, prompting bears to cover some short positions.

The Dow Jones industrial average was up 80.87 points, or 0.69 percent, at 11,861.81. The Standard & Poor's 500 Index was up 6.36 points, or 0.52 percent, at 1,235.46. The Nasdaq Composite Index was down 5.85 points, or 0.22 percent, at 2,615.80

European shares were led higher by euro zone financials on hopes Italy and Greece, fractious focal points of the region's debt crisis, could be set to usher in new governments and press ahead with reforms.

The FTSEurofirst 300  index of leading European shares closed down 0.3 percent at 963.58 points.

A fresh foray into the sovereign debt market by the European Central Bank, back buying Italian paper and pushing yields lower, also helped, although sentiment remained cautious and volatility edged slightly higher.

In Asia, Japan's Nikkei average fell nearly 3% to its lowest close in five weeks after the surge in Italian bond yields signalled that the worst may not be over in Europe's debt crisis, while banks plunged after a drop in their global peers.

The Nikkei lost 2.9% to end at 8,500.80, compared with a 3.7% drop in the Standard & Poor's 500 Index yesterday. The broader Topix index fell 2.6 percent to 730.30.The Nikkei advanced 3.3 percent in October, while the S&P gained 11%.