Greek markets up as investor fears shift to Thailand

Stocks were mostly positive on Monday with the Dow regaining the 11,000 level.

However, the spotlight was on Greece following the rescue package announced over the weekend. From Bloomberg:

Stocks in Greece surged the most in two weeks after European governments offered the debt-plagued nation a rescue package worth as much as 45 billion euros ($61.3 billion).

The ASE Index advanced 69.82, or 3.5 percent, to 2,061.04 in Athens trading, the biggest gain among 96 global equity markets tracked by Bloomberg today. The FTSE/ASE 20 Index of Greece’s biggest companies rose 4 percent to 1,024.58. The Cypriot General Index added 2.8 percent to 1,531.42.

More significantly, Greek bond yields fell. Bloomberg reports:

Greek bonds jumped after a euro- region accord to lend Greece as much as 45 billion euros ($61 billion) at below-market interest rates boosted investor confidence that the government can reduce its budget deficit.

The two-year yield fell the most since Bloomberg began collecting the data in 1998. European finance ministers said yesterday they would offer as much as 30 billion euros in three- year loans in 2010 at about 5 percent, with the International Monetary Fund providing another 15 billion euros. The cost of insuring Greek debt using credit default swaps dropped the most on record...

Greek two-year yields tumbled 91 basis points to 6.25 percent as of 4:30 p.m. in London after earlier falling to 5.42 percent. The 4.3 percent security due March 2012 rose 1.57, or 15.7 euros per 1,000-euro face amount, to 96.50. Ten-year yields slid 44 basis points to 6.77 percent.

While Greek markets enjoyed a positive session on Monday, markets turned sour in Thailand. Bloomberg reports:

Thai stocks and the baht fell, while bond risk climbed after soldiers and protesters died in unrest that prompted the biggest selloff of the nation’s equities in more than four months.

The benchmark SET Index lost 3.6 percent to close at 760.9, the biggest drop since Oct. 15. The baht weakened 0.3 percent to 32.33 against the dollar, according to Bloomberg data.

As many as 21 people were killed and 858 injured when protesters seeking to oust Prime Minister Abhisit Vejjajiva fought with security forces two days ago. Thai authorities are investigating whether a third group may be responsible for gun and grenade attacks that sparked the deadliest street clashes between troops and anti-government protesters in 18 years.