SHANGHAI, Jun. 13 (SMM) -- Base metal prices rebounded slightly, while European debt crisis continued to plague the market. Uncertainty grows as Spanish government bond yields hit a record high since the insurance of euro, and Greece's general election nears. In this context, the market should take a wait-and-see attitude.
On June 12th, Chicago Federal Reserve Chairman Charles Evans supports to take measure stimulating employment and realizing faster economic growth including prolonging twist operation. On the same day, European central bank's vice president said the bank will take further action according to economic development. He emphasized economic growth is in the face of downturn, causing risk appetite to grow and equity markets to strengthen. The Dow Jones Industrial Average closed at 12,573.80, up 165.27 or 1.31%; S & P 500 Index closed up 15.25 at 1,324.18, a rise of 1.17%; the Nasdaq Composite Index was up 33.34 to 2,843.07, an increase of 1.19%.
Following Fitch downgrading the ratings of the two largest banks in Spain, it further downgraded the ratings of 18 banks in Spain, predicting a continuous recession in Spain and cash flow problems in the banking sector. EU finance ministers agreed to supply EUR 100 billion of bailout funds to Spanish banking sector, but the news only boosted the market briefly, with concerns that European debt crisis will spread growing. Lacking details of the bailout plan, Spanish 10-year government bond yields continued to surge to 6.51%, posting the largest increase in four months. Besides, Cyprus is expected to be another eurozone country seeking for bailout. It will likely apply for bailout funds from EU. EU will bail Spain on the basis that the bailout funds will only be used in its banking sector. Cyprus' problem signals that eurozone debt crisis is spreading.
Base metals prices remain weak due to ongoing European debt crisis. But measures took to cope with economic recession will give support to the market. But the result of Greece's general election will dominate the market. In this scenario, metals should remain fluctuating.