Global stock markets soar on EU debt deal, US data

Global stock markets soared in a massive relief rally Thursday after EU leaders agreed a deal to solve the eurozone debt crisis and data showed the US economy growing faster than expected.Dealers said there may be many reservations about the deal but the immediate reaction was one of relief that European leaders had finally come up with a coherent response to a crisis threatening to sink the euro and the world economy.The banks performed best, having been under intense pressure on concerns over their exposure to Greek government debt, with private sector creditors now agreeing to take losses of 50 percent on their holdings of Greek bonds.This is combined with more than 100 billion euros in funds to help the banks cover their losses, ensuring the European banking system escapes the worst of any fallout.Dealers said figures showing the US economy grew 2.5 percent in the third quarter, up sharply from the second and ahead of forecasts for around 2.3 percent, also gave sentiment a boost.In London, the FTSE-100 index of top companies closed up 2.89 percent to 5,713.82 points while in Paris, the CAC-40 jumped 6.28 percent to 3,368.62 points. In Frankfurt the DAX 30 gained 5.35 percent to 6,337.84 points.Other European markets posted similar sharp gains after months of turmoil driven by worries the eurozone debt crisis could torpedo the euro and push the global economy back into recession.In Asian trade earlier Thursday, Tokyo closed up 2.04 percent and Hong Kong rallied 3.26 percent, helping set up Europe for a positive day.Overall, the agreement is welcome and addresses the fundamental issues underlying the eurozone debt crisis, said Barry Dixon, analyst at Davy stockbrokers.Whether the detail of the agreement is sufficient to quell market concerns over the medium term remains to be seen, he cautioned, sharing the concerns of many investors.Despite the huge gains made on the markets, not all commentators were convinced.The plans announced by euro-zone policymakers ... look more like a peashooter than the bazooka previously promised to tackle the regions problems, sceptial Capital Economics analysts wrote in a note.We have not altered our view that the crisis will deepen over the coming quarters, ultimately resulting in some form of break-up of the currency union.