World markets rally on Spain, China news

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NEW YORK (CNNMoney) -- World markets rallied Monday after Spain's request for up to ?100 billion ($125 billion) to capitalize its troubled banks and the weekend's economic data from China

In afternoon European trading, London's FTSE (UKX) rose 0.6%, the DAX (DAX) in Frankfurt was up 1.6%, and the CAC 40 (CAC40) in Paris added 1.1%.

In Asian trading, Tokyo's Nikkei (N225) index ended up 2%. Hong Kong's Hang Seng (HSI) index rose 2.4% and Shanghai's composite index (SHCOMP) gained 1.1%.

U.S. stock futures were about 0.8% higher.

The markets reacted to the announcement Saturday that Spain will seek aid from the European Union to bolster its troubled banks.

The Ibex 35 index in Madrid rose 1.6%. Spanish government bonds rebounded, with the yield on the 10-year bond easing to 6.2%.

The euro rose against the dollar and the yen.

But many details of the bailout plan for Spanish banks remain to be finalized and analysts warned the initial optimism in financial markets could be short lived.

"There's still neither a growth plan nor Europe-wide structural reform," said Kit Juckes, a foreign exchange analyst at Societe General, in a note. "Spain's economy remains in depression, even if they have much better weather than London does this morning."

Greece is also in focus this week ahead of elections on Sunday. The concern is that anti-austerity political parties will win enough seats in Parliament to derail the bailout program Greece secured earlier this year.

The runoff is being viewed as a pivotal moment that could determine if Greece remains a member of the euro currency union or not.

In China, the government issued several reports that seemed to give hope that further stimulus to the economy could be forthcoming. On Saturday, the government said inflation eased to a 3% annual rate in May, the fourth straight month of prices below 4%.

On Sunday, the government said the May trade surplus was $18.7 billion, boosted by both record imports and exports.

Oil rose nearly a dollar a barrel to just above $85.

U.S. markets are coming off their best week of 2012 when they open Monday. The Dow Jones industrial average (INDU) rose 3.6%, the S&P 500 index (SPX) gained 3.5% and the Nasdaq composite index (COMP) was 3.9% higher.?

First Published: June 11, 2012: 5:18 AM ET

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