NEW YORK: World equity markets rose yesterday as investor fears of euro zone turmoil following the Greek elections this weekend were partly offset by talk the world's major central banks stand ready to make a coordinated response to ease any market dislocation.
The euro rebounded and US stocks shrugged off a new batch of weak economic data, with US consumer sentiment falling in early June to a six-month low, according to a survey.
But anxiety that the outcome of Sunday's elections could lead Greece to exit the euro led other investors to raise their safe-haven bond holdings, driving up US government debt prices.
And measure of market fear in the equities market, the CBOE Volatility Index, was up 1.5 percent at 22, after earlier rising above 23.
"Ahead of Sunday's election in Greece, central bankers stand ready, again," said Peter Boockvar, equity strategist Miller Tabak & Co. in New York. "With all the water central banks have expended out of their fire hoses over the past few years in their attempt to 'do something,' I can only think of magic candles. Those candles you blow out that only flare up again immediately after."
Central banks from Tokyo to London prepared for any turmoil following Greece's election, with the European Central Bank hinting at an interest rate cut and Britain set to open its coffers.
Officials from the G20 told Reuters on Thursday that the top central banks stood ready to stabilize markets by providing liquidity if the election result causes financial upheaval.
G20 leaders meet in Mexico on Monday and Tuesday as the results of the Greek vote and market reactions emerge.
On Wall Street, the Dow Jones Industrial Average was up 61.98 points, or 0.49 percent, at 12,713.89. The Standard & Poor's 500 Index was up 7.42 points, or 0.56 percent, at 1,336.52. The Nasdaq Composite Index was up 18.87 points, or 0.67 percent, at 2,855.20.
In Europe, the FTSE Eurofirst 300 index of top European shares closed up almost 1.0 percent, with European bank stocks climbing 1.8 percent.
MSCI's all-country world equity index rose 0.8 percent at 304.79 points, and emerging markets gained 1.2 percent.
German Bund futures, another traditional safe haven, extended gains, accelerating their rise after the release of the US economic data. Bund futures rose to 142.36, up 53 ticks on the day.
Yields on the 10-year US Treasury note fell at one point to 1.564 percent, the lowest in about 10 days. The note later traded to yield 1.5823 percent, with prices up 17/32.
The euro initially hit a session low of $1.2590 against the dollar and later rebounded, up 0.06 percent at $1.2629.
The US dollar index fell 0.4 percent to 81.691.
Brent crude rose 18 cents to $97.35 a barrel. US crude rose 20 cents to $83.71 a barrel.
Spot gold prices rose $1.84 to $1,624.70 an ounce.
Meanwhile, a senior US Treasury Department official said yesterday, G20 leaders at their meeting next week will focus on strengthening global growth and encouraging China and other emerging countries to bolster growth and support currency flexibility.
"The G20 will look to maintain momentum on rebalancing demand, which is critical to stronger overall growth," Lael Brainard, Treasury's undersecretary for international affairs, told reporters ahead of the Monday-Tuesday summit in Mexico.
"Key of course to achieving this among other things is for China and other surplus emerging market economies to take fiscal and other measures to support domestic consumption as well as allowing exchange rates to reflect market forces," she said.