European stocks climb, Athens surges

GMT 12:30 2015 Thursday ,11 June

Arab Today, arab today European stocks climb, Athens surges

Evzoni presidental guards march past the Greek parliament in Athens
London - AFP

Europe's main stock markets rose Thursday, with Greek shares soaring on hopes that Athens could be close to a deal with its creditors, analysts said.

Athens' main index was up 7.12 percent to 815.26 points in early afternoon deals.

Elsewhere, London's benchmark FTSE 100 index of top companies rose 0.45 percent to 6,860.87 points and the CAC 40 in Paris climbed 0.70 percent to 4,969.65.

Frankfurt's DAX 30 index won 0.74 percent to 11,349.21 points compared with Wednesday's closing level.

In foreign exchange activity, the euro fell to $1.1258 from $1.1324 late on Wednesday in New York.

"Equity markets continue to rebound from recent lows on renewed Greek optimism," said Mike van Dulken, head of research at traders Accendo Markets, after European indices had surged the previous day.

Greek premier Alexis Tsipras was to meet with European Commission chief Jean-Claude Juncker Thursday after he agreed with the leaders of France and Germany to intensify efforts for a bailout deal aimed at preventing Athens from defaulting.

Greece's creditors have refused to release the last 7.2 billion euros ($8.1 billion) remaining in its EU-IMF bailout, which is due to expire on June 30, unless Athens agrees to tougher reforms.

Without the cash Greece will be unable to pay its debts, after having already ordered local authorities to turn over their cash reserves in order to meet earlier commitments.

A default could send Greece crashing out of the eurozone, with possibly disastrous consequences for the bloc and beyond.
Greek hopes also boosted Asian stock markets, which rallied Thursday additionally on a strong close on Wall Street and upbeat Chinese economic data, traders said.

Data Thursday showed Chinese industrial production reached a three-month high in May while retail sales rebounded from a nine-year low, supporting also European stock markets.

"Helping to boost positive sentiment... are industrial production and retail sales data out of China showing moderate improvements," said Markus Huber, senior analyst at brokers Peregrine & Black.

On the corporate front, shares in Royal Bank of Scotland gained 1.66 percent to 360.70 pence after the British government announced late Wednesday it would begin selling its stake in the bailed-out lender.

In an annual address to the London financial community, Chancellor of the Exchequer George Osborne said the government would begin selling its 80-percent stake in RBS, which it rescued with public money at a cost of £45.5 billion ($70.6 billion, 62 billion euros) following the 2008 global financial crisis.

A potential taxpayer loss of £7.2 billion on RBS would be offset by proceeds from other sales such as from fellow bailed-out bank Lloyds, the Treasury said in a statement.

"Ultimately there is unlikely to be an optimal time to sell down the taxpayers stake in RBS, but by signalling his intention to do it now allows the chancellor some wriggle room to slow it down or speed it up as circumstances dictate," said Michael Hewson, chief market analyst at CMC Markets.


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