City dealers put renewed eurozone fears to one side today as shares in London bounced back from steep falls on Wednesday.
The resignation of two Portuguese ministers this week in protest at austerity measures and the threat of Greece losing bailout payments sent tremors through markets on Wednesday, hitting shares and triggering a spike in bailed-out Portugal’s borrowing costs.
But London’s FTSE 100 bounced back 57.86 to 6287.73. There were also gains in Asia overnight and bond markets were calmer, although Spain was charged more to borrow €4 billion (€3.4 billion) from debt markets amid concerns over its Iberian neighbour.
Contagion has also been limited by European Central Bank president Mario Draghi’s pledge to do “whatever it takes” to preserve the euro, potentially stepping in to support sovereign bond markets.
Alastair McCaig, market analyst at spread-betting firm IG said: “European shares have clawed back most of the losses incurred over the past few days, clinging to the notion that Draghi will step in.”
The focus now switches to non-farm jobs figures from the US tomorrow for the latest picture of its economy.
US markets are closed today for Independence Day, but reports of fewer Americans applying for unemployment benefits than expected boosted shares in Japan, Hong Kong and Shanghai.
