Hopes that the European debt crisis may ease after Germany’s top court smoothed the way for Berlin to participate in bailout packages lifted Europe’s financial markets.
They rebounded from three days of major losses that had taken share prices to their lowest levels in two years.
The decision was expected and avoided a euro zone meltdown. Analyst Robert Halver of Baader Bank in Frankfurt said: “The decision of German Supreme Court did not come in as a big surprise.The markets had already expected this and I guess in the future, we will have more rescue packages for the euro zone.”
Of the biggest bourses, London rose three percent, Paris 3.6 percent and Frankfurt four percent while Athens gained almost eight percent.
Gold prices tumbled three percent as the sharp rally in stock markets prompted investors to take profits after the precious metal’s rally to record highs in the previous session.
However market analysts warn this is a technical rebound with only modest volumes of shares being traded and is likely to be short term as fears over the euro zone debt crisis continue.