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Stocks surge as Portugal upgraded out of junk status

Portugal's stock market is surging and its government borrowing rates are falling after the country recovered its investment-grade rating from Standard & Poor's.

The Lisbon stock exchange rose more than 1% on Monday and the 10-year bond yield dropped 0.29 percentage points - an unusually large one-day increase - to 2.49%, the lowest rate since late 2015.

S&P said on Friday that Portugal has made "solid progress" in restoring its financial health since needing a 78 billion euro (£68 billion) bailout in 2011 amid the eurozone crisis.

It raised its rating from BB+, or junk status, to BBB-.

Fitch and Moody's, the other two main ratings agencies, still rate Portugal's debt at junk.

After a period of austerity and recession, Portugal expects the economy to grow 2.5% this year.

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