Spanish Shares Open Higher As Bond Yields Collapse

Spain's stock market rose in early trading Monday, despite losses elsewhere across the world, amid expectation the European Central Bank may purchase Spanish and Italian government bonds.

A Madrid-based trader said the ECB news, which has resulted in a collapse in Spanish bond yields, is the main reason for the bounce after last week's selloff. At 0710 GMT, the country's blue-chip index was up 2.2% at 8,862.7.

Spanish bank stocks, among the worst losers in recent days, led the rebound. The shares of the country's two largest banks, Banco Santander SA (STD) and BBVA SA (BBVA.MC), were both over 4% higher in heavy-volume trading. More than 11 million Santander shares had been traded at that point, compared with just two million shares of Telefonica SA (TEF), Spain's largest company by market value.

The ECB said late Sunday it would actively implement its government bond-buying program, signaling it may purchase Italy's and Spain's government bonds. European traders said the central bank has already been spotted buying Italian bonds.

 

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