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Euro shares power to 3-week high

Wednesday, October 17 17:09:33

Europe's equity market powered to three-week highs today, with the Madrid bourse and the banking sector bolstered by news that Spain had escaped a rating downgrade to 'junk' and hopes that it will soon seek a bailout.

Rating agency Moody's late on Tuesday affirmed Spain's investment grade rating on the assumption that Madrid would formally ask for help and trigger the European Central Bank's sovereign bond buying rescue plan.

"Whether it is tomorrow, or one week, or two weeks for the help to be given to Spain ... it has to be done," Vincent Guenzi, chief strategist at Cholet Dupont, said.

As the situation in the euro zone improves, the market could see more buyers return, he said, with sentiment also supported by a brightening economic backdrop in the United States.

"There are a lot of participants that are still under-invested in European equities ... altogether I think we will go through and finish the year at a higher level," he added, calling the Euro STOXX 50 to end December at 3,800 points.

The blue-chip Euro STOXX 50 index advanced 0.9 percent to 2,570.63 points on Wednesday, while the FTSEurofirst 300 index provisionally closed up 0.5 percent at 1,118.71.

Regionally, the top performers were Spain, Italy and Greece, with the latter's benchmark index hitting 13-month highs.