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European stock markets surged on Monday, led by a 5% rally in the Spanish index, after the eurozone finance ministers agreed to extend a helping hand to Spain's ailing banks and China's trade data came in ahead of estimates. The euro gained while the dollar and yen fell on the back of further improvement in global risk tolerance.
The IBEX 35 index in Madrid was up 4.6% at 6,855, with banks like Banco Santander and BBVA pacing the rise.
The Stoxx Europe 600 index was up 1.7% at 246.21.
Spain became the fourth eurozone country to request some sort of financial assistance on Saturday when its Finance Minister Luis de Guindos asked the European Union for loans of up to €100 billion to help bail out its banks.
The loan-recapitalisation plan outlined by Luis de Guindos drew immediate support from the European Union, the International Monetary Fund (IMF) and the US. The IMF said the core of the Spanish banking sector was healthy, but warned that several banks remain vulnerable.
The euro reached US$1.2671, the highest since May 23, before trading at US$1.2631 as of 1:36 p.m. in Tokyo, 0.9% higher than the June 8 close in New York. It jumped 1.1% to 100.59 yen. The dollar advanced 0.2% to 79.64 yen.
The European currency is down 3.6% during the past six months, the worst performer among the 10 developed-nation currencies. The dollar is up 2.9% and the yen is flat.
Madrid said that it would specify precisely how much it needs once independent audit reports are out in just over a week.
"The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to €100bn in total," a Eurogroup statement said after a two-and-a-half-hour conference call of the 17 finance ministers.
Two independent consultancies - Oliver Wyman and Roland Berger - are slated to deliver their assessment of the Spanish banking sector's capital needs some time before June 21.