A stress test conducted by the European insurance regulator, EIOPA, has revealed that 10pct of European insurers would need to raise fresh capital in the event of a severe economic shock.

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European shares rose for the sixth straight day on Monday. Jitters about Greece continued to ease and investors were heartened about the stress test results on insurers. Investors took in their stride comments by rating agency Standard and Poor´s that Greece would be in default if a French Government rollover plan went ahead. Mining shares rose as base metal prices lifted.

In London trade shares in BHP Billiton rose by 0.6pct with Rio Tinto up 0.1pct. The FTSEurofirst index rose by 0.2pct with the German Dax up 0.3pct and the UK FTSE up by 0.5pct.

In Canada, the Toronto sharemarket rose by 85pts or 0.6pct on Monday with shares effectively playing catch-up to the solid gains recorded in the US on Friday. Higher metal prices buoyed shares of base-metal miners.

US share and bond markets were closed for the Independence Day holiday on Monday. On Friday, the Dow Jones rose by 168pts or 1.4pct with the S&P 500 up 1.4pct while the Nasdaq rose by 43pts or 1.5pct. US 2yr yields were flat at 0.474pct but US 10yr yields rose by 1pts to 3.182pct.

Major currencies eased against the US dollar in European trade before clawing back losses in North American trade. The Euro eased from highs near US$1.4555 to US$1.4495, ending North American trade near US$1.4535. The Aussie dollar eased from highs of US107.65c to lows near US107.10c, ending North American trade near US107.25c. And the Japanese yen eased from 80.55 yen per US dollar to JPY80.85, before ending North American trade around JPY80.75.

Benchmark crude oil prices were little changed on Monday in holiday-thinned trade. Supporting prices was news that negotiations between the Libyan Government and opposition parties continue to be at a stalemate. US Nymex crude oil rose by US6c to US$95.00 a barrel and London Brent crude fell by US38c to US$111.45 a barrel.

Base metal prices posted modest gains in thin trade on the London Metal Exchange on Monday. Metals rose up to 1.4pct with zinc doing best followed by nickel, up 0.7pct. And the gold price rose in European trade as bargain hunters moved in. Physical trade to India picked up as the gold price dipped below US$1,480 an ounce. The spot gold price is trading near US$1,495.45, up from levels of US$1,485.80 in late New York trade on Friday.

Ahead: In Australia, the Reserve Bank Board meets. The Performance of Services index and the trade data are released. In the US, data on factory orders is expected.

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