Market Update: Reduction in eurozone tensions: markets cheer Cyprus’ last-ditch deal for a €10bn bailout

Wall Street stocks finished higher on Friday (Dow Jones +0.6%, S&P 500 +0.7%), partially helped by optimism that Cyprus might reach a deal over the weekend to avert a banking crisis and a wider financial contagion in the eurozone. All ten S&P 500 sectors rose, with consumer stocks leading the gains while financials were relative laggards.

News of the last minute deal struck late on Sunday night/early Monday morning between Cyprus and international lenders paving the way for the release of €10bn in bailout money, helped Asian shares advance in overnight trading. The Nikkei 225 gained the most rising 1.7%. European bourses were in chirpy mood too this morning as the threat of financial contagion in Europe receded, helping global growth prospects. At the time of writing the single currency (euro), commodities and stocks were all firmer with the FTSE Eurofirst 300 up 0.8%, the FTSE 100 up 0.6%, copper gaining 0.1% while Brent crude oil rose 50 cents to $108.16 per barrel.