Sentiment lifted after successful bond auction (ISFM) (12-01-2011)

The bond auction in Portugal was successful helping ease fears that the country would need a bailout, and markets breathed a sigh of relief. Nobody can tell though how soon the issue may resurface.

Earlier today, Asian markets ended on a positive note helped by gains in the resource-sector shares and financials, which followed in the wake of the gains on Wall Street overnight as well as a sharp rise in commodity prices.

Stocks around Europe had been high already higher ahead of the auction, and continued strongly after the news that Portugal managed to sell around euro1.25 billion ($1.62 billion) worth of debt in its first bond auction of the year. The region-wide advances notwithstanding, sentiment remained cautious, as more countries are to hold bond auctions this week, most notably Spain, which investors are eyeing with trepidation, given that this country represents a fair bit of the region’s economy.

Among currencies, the euro slipped as investors took profits after the success of the auction was confirmed, albeit at a higher interest rate than the one held last November.

On Wall Street, U.S. stocks opened the session higher, showing the relief felt by investors after Portugal's sound bond sale and reacted to hopeful signals from the banking sector.

Source: ISFM