The IMF and EU agreed to put together a €720bn (£625 billion) stability fund and the ECB (European Central Bank) announced it planned to buy government and other bonds on the open market. The ECB move was a complete reversal of policy from that stated from its President Jean-Claude Trichet last week.The bank will also reintroduce unlimited offers of three- and six-month liquidity to ease the current liquidity situation.
The eurozone will provide loan guarantees up to €440bn and a further €60bn will support weaker member states such as Portugal and Spain. The IMF will provide up to a further €220bn.
Commodity stocks are moving up significantly this morning. Portfolio holding Coal of Africa (CZA) is up 9% to 133p whilst BHP Billiton (BHP) is 5.8% to £19.73 and Kazakhmys is 9.2% at £13.09. Financials also strengthened with Barclays (BARC) up 34p or 12% to 318p and Royal Bank of Scotland (RBS) up 8% to 49.4p. BP (BP.) is one of the few stocks down, currently down 7p at £5.46 as concerns about the Gulf of Mexico spill still weigh.
Rockhopper Exploration (RKH) shot ahead a further 54p at one stage on further news about its oil find in the Falklands Islands and the share price is now trading at 28% or 41p at 187p. This means RKH is up over 500% since a low of 36p last Wednesday. I'm just a tad disappointed selling out at 125p! For those brave enough to have turned off their trading screens since last week they will have been mightily rewarded - high risk, very high return.
After waiting several weeks for a correction, my decision to start buying last week has been confirmed as correct. With this huge move up today, I wish I had been more aggressive with my buying of stocks especially in the commodity space.
