Exchange traded funds indexed to European stocks rose Friday in early U.S. trading after Spain and France sold bonds and markets focused on a meeting of European Union finance ministers.
However, euro currency ETFs were lower Friday as U.S. Treasury Secretary Timothy Geithner met with EU ministers to discuss ways to combat the debt crisis. [Euro ETFs Weaken]
Spain’s Treasury sold about 4 billion euros or $5.47 billion of bonds on Thursday, while France sold 9.8 billion euros to cautious investors. France recently saw some of its largest banks suffer credit downgrades. [Europe ETFs Rise After Leaders Soothe Nerves Over Greece]
“It is quite positive, they were able to issue an amount that is very close to the maximum expected at a bid to cover a bit lower than we had in May,” Alessandro Giansanti, rate strategist at ING, Amsterdam said of the Spanish auction, on Reuters.
Investors will be watching to see if Spain’s Cabinet will restore the wealth tax, proposed by Finance Minister Elena Salgado. The tax levy on a person’s net worth was suspended back in 2008.
Analysts say that the auction still indicates that France is a good bet compared to its peers in the Eurozone. [France ETF Shakes Off Moody’s Bank Downgrades]
“It confirms this trend again that there’s still more than robust demand for short-dated triple-A paper. You can argue a lot about France’s rating but…everybody is comfortable in buying France instead of picking up a couple of basis points over Bunds in the other triple-A’s,”WestLB strategist Michael Leister said, on Reuters.
The iShares MSCI Spain Index Fund (NYSEArca: EWP) and iShares MSCI France Index Fund (NYSEArca: EWQ) gained about 4% on Thursday and rose in early trade Friday. [Spain ETF in Focus After Bond Auction]
Tisha Guerrero contributed to this article.