You'd almost have to question whether Europe is really in the throes of a debt crisis, undertaking austerity measures and facing high unemployment. You wouldn't think so by looking at the markets, where investors flung money at Spanish and French bonds and bought stocks and commodities that benefit from growth.
Britain's FTSE 100 gained 0.3 per cent, France's CAC 40 rose 0.9 per cent and Germany's DAX rose 0.3 per cent. Japan's Nikkei rose 1 per cent, while Hong Kong's Hang Seng gained 1.3 per cent. Global stocks as measured by the MSCI index were up 0.4 per cent at 312.04, the highest level since Oct. 31.
Dow futures reflected greater caution, rising just 14 points, or 0.1 per cent, to 12,518. S&P 500 futures edged 1.5 points, or 0.1 per cent, higher to 1,303.70.
Spain raised 6.6-billion euros, far more than its initial aim of 3.5-billion to 4.5-billion euros, in debt maturing in 2016, 2019 and 2022. The interest rate on 10-year bonds was 5.40 per cent, down from 5.54 per cent in the last auction in December.
France sold 7.965-billion euros of medium-term bonds at the top of a target range of 6.5-8.0 billion. It received bids for 18.9-billion euros.
Both auctions come after Standard & Poor's downgraded the countries' sovereign debt ratings on Friday and the European Central Bank flooded banks with cheap money to support lending.
Banking stocks were broadly higher across Europe. Germany's second-largest bank, Commerzbank AG, said it won't need to help from shareholders or the government to boost its capital base.
The euro climbed off Monday's 17-month low against the dollar below $1.27 (U.S), trading around two cents higher at $1.2881.
Copper rose to a four-month high, changing hands at $8,410 a tonne.
U.S. crude oil rose $1.10 to $101.69 a barrel.
The Canadian dollar popped higher, trading at 99.11 U.S. cents.
Gold also gained, up $3.90 at $1,663.80 an ounce.
What could go wrong? Europe and its banks still face the possibility of a Greek sovereign debt default in March, when Athens must repay loans.
Greece and its bondholders have made little progress in talks on a debt swap, with both sides far apart over the interest payment that Greece must offer on new bonds, according to a Reuters report.
Athens and its foreign lenders have offered a coupon of just over 3.5 per cent, but bondholders rejected that and were angling for a coupon of at least 4 per cent, the news agency cited an unidentified official as saying.