US and European stocks clawed back more of the steep losses incurred at the start of this week as investors took heart from reports that George Papandreou, the Greek prime minister, had abandoned plans for a referendum on the bail-out package.
Sentiment was further bolstered by news of an unexpected interest rate cut from the European Central Bank.
“Risk assets rallied on expectations that the proposed Greek referendum will not take place after all and that either the existing government or, more likely, a new transition government will accept the bail-out package,” said Jonathan Loynes at Capital Economics.
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