Markets in the US are also enjoying the stock rally in Europe spurred by EU leaders’ agreement on a plan to solve the eurozone debt crisis.
The deal was hinged on banks taking losses of 50% on Greek debt, though they will receive help from governments in recapitalising efforts in return. EU banks will need to find 100 million euros in capital in measures to protect them against defaulted loans from other indebted European countries.
The decision to aid EU leaders and take a higher markdown for their Greek debt has helped banks tremendously in the stock market, as banks are the biggest gainers in both European and American markets.
French institutions, which are known to be heavily exposed to Greek debt, have seen shares in some firms rise by 20%.
Globally, markets closed high. The Dow Jones Index in the US was up 2.73% higher in afternoon dealings, while London’s FTSE 100 Index finished up 2.9%.
France’s Cac was up 6%, while Germany’s Dax saw a rise of 5% at the end of afternoon trading.
Even American banks, which could be heading for another credit downgrade, were up, with Bank of America and JP Morgan both closing 7% higher.
In the UK, Barclays rallied to finish up 18%, while Royal Bank of Scotland rose 10%.
In Greece, at the heart of the crisis, some banks also rose 10%, while shares jumped a total of 4.8%.
The Asian markets have been tumbling sharply on fears of the never-ending eurozone debt leading to a default from Greece.
Surprisingly, the Shanghai index showed only a 0.4% rise. The Sydney market, which was unable to open for four hours from technical difficulties, saw a rise of 1.8%.
For the eurozone, mounting pressures on leaders to come to an agreement have turned into good business.
Their deals to have banks accept a higher loss on Greek debt, bolster the eurozone bailout fund, and recapitalise banks have made the global trading sector forget the risk-shy investment strategies that have dominated markets recently.