World markets cheer EU deal

By Aaron Smith @CNNMoneyInvest June 29, 2012: 8:41 AM ET

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NEW YORK (CNNMoney) -- World markets rallied Friday after European Union member nations approved an economic growth package and hatched a deal to ease the recapitalization of struggling banks.
"Despite the seemingly growing rift between Germany and the rest of the major Eurozone governments, these morning headlines are enough to cheer the markets for now," wrote Deutsche Bank analysts Jim Reid and Colin Tan in a research note.
London's FTSE (UKX) jumped 1.5% in midday trading, while the DAX (DAX) in Frankfurt and the CAC 40 (CAC40) in Paris both surged by more than 2.7%. Madrid's IBEX 35 climbed 3%.
The EU leaders agreed to form on a single supervisory body for the continent's banks, and that body would have the ability to aid the banks without adding to the sovereign debt of nations.
"The aim was to have this in place by the end of the year and to break the 'vicious circle' between banks and sovereigns," the Deutsche Bank analysts wrote.
Most European bank stocks rode the wave. In Paris, BNP Paribas (BNPQF) and Credit Agricole (CRARY) both soared by about 5% and Societe Generale (SCGLY) rose 2%. In Frankfurt, Commerzbank (CRZBY) dropped 3.7% but Deutsche Bank (DB) surged 3.7%. In Madrid, Banco Santander (SAN) jumped 4%.
Asian markets also rallied. The Hang Seng (HSI) in Hong Kong closed higher by 2.4%, Tokyo's Nikkei (N225) was 1.5% higher at the close, and the Shanghai Composite (SHCOMP) was up by 1.2%.
The rising tide was likely to spread to the United States, with Dow Jones industrial average (INDU), Nasdaq (COMP) and S&P (SPX) futures making significant gains. 

First Published: June 29, 2012: 7:34 AM ET