German News Lifts Stocks
May 04, 2011
The IBEX-35 index of the 35 most liquid stocks on the Madrid Stock Exchange rose surged 62.37 to 4060.15, while the Madrid General Index rallied 4.71 to 356.85. The Bundesbank allowed its repo rate to be lowered to 3% from 3.30%, well above the 0.05 to 0.20 percentage point cut many analysts had expected. The repo rate is the bank's main instrument for influencing the money market. The Bundesbank's move fueled speculation that the Bank of Spain might move to cut the Spanish benchmark interest rate at its next repurchase tender on Friday. The benchmark rate is Spain's main monetary policy instrument, determined by the central bank's advances on liquidity to the banking system through securities repurchase tenders held every seven to 13 days. But some traders remained convinced that the Spanish central bank will resist easing rates while details of the 2012 Spanish budget were unclear.
VastPress 2011 Vastopolis
