European stocks rallied today as the Netherlands and Spain shrugged off political and economic turmoil to sell a combined €3.9 billion (£3.2 billion) in debt.
The auctions came after a turbulent day for the Eurozone yesterday which saw Spain’s double-dip recession confirmed, and the resignation of the entire Dutch government as the centre-Right coalition failed to agree on austerity measures.
Francois Hollande’s likely victory in the French presidential elections also spooked markets, although most European bourses clawed back some of the losses taken yesterday.
Shares in Madrid jumped 1.7% and Germany’s DAX added 1.6%, although London’s FTSE 100
made only a fitful recovery in the wake of yesterday’s fall of almost 2%.
The Netherlands raised €2 billion euros through the sale of two-year and 25-year bonds, paying more for the cash but not enough to worry the markets.
DZ Bank strategist Michael Leister said: “The negative news doesn’t extend further given that the auction is ... a solid one.”
Spain, which has taken centre stage on concerns about its ability to meet budget targets as well as the health of its banks, sold €1.9 billion in three- and six-month Treasury bills, although its borrowing costs almost doubled.
