Chinese Reaction to Euro Deal Focuses on Disaster Averted
Created: 2011-10-28 10:20 EST
Category: Business
Embed:
Euro zone leaders announced agreement on Thursday on a comprehensive package of measures to tackle the euro zone's sovereign debt crisis.
The deal calls for private owners of Greek bonds to accept a 50 percent write-down on their investment. The scope of the new version of the euro zone's rescue fund would be increased substantially to about one trillion Euros.
And China-region investors were relieved, as fears lessened over a hard landing for the Chinese economy.
[John Noonan, Asia Pacific FX Head, IFR Markets]:
"Well the markets were pleasantly surprised by the fact that there was as much details as there was, particularly on the 50 percent haircut. The reports earlier indicated that the banks were holding out for 40 percent while the EU wants something closer to 60."
Thursday's numbers made the relief apparent: the Hang Seng Index closed up 3.26 percent, The China Enterprises Index of top Hong Kong-listed mainland companies was up 5.13 percent, and The Shanghai Composite ended up 0.34 percent.
The deal calls for private owners of Greek bonds to accept a 50 percent write-down on their investment. The scope of the new version of the euro zone's rescue fund would be increased substantially to about one trillion Euros.
And China-region investors were relieved, as fears lessened over a hard landing for the Chinese economy.
[John Noonan, Asia Pacific FX Head, IFR Markets]:
"Well the markets were pleasantly surprised by the fact that there was as much details as there was, particularly on the 50 percent haircut. The reports earlier indicated that the banks were holding out for 40 percent while the EU wants something closer to 60."
Thursday's numbers made the relief apparent: the Hang Seng Index closed up 3.26 percent, The China Enterprises Index of top Hong Kong-listed mainland companies was up 5.13 percent, and The Shanghai Composite ended up 0.34 percent.
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