Spanish, French Stocks Lead Europe Rally as Greece Submits Plan
European stocks climbed, poised for a weekly gain, after Greece offered to meet most of creditors’ demands in exchange for a new bailout.
The Stoxx Europe 600 Index rose 1.5 percent to 386.91 at 10:04 a.m. in London. Benchmark gauges of Spain, Italy and France, which entered corrections on Monday, surged more than 2.1 percent for the best performances among western-European markets. The Stoxx 600 is up 0.9 percent for the week, erasing losses from the first two days of the period.
Greece sought 53.5 billion euros ($59.5 billion) in aid, submitting to European institutions a proposal that almost mirrored one by creditors on June 26. Greek voters had rejected that plan in a Sunday referendum, sending stocks tumbling. The package of spending cuts, pension savings and tax increases faces its first hurdle in the country’s parliament on Friday.
“The market is quite satisfied that the Greek government made a proposal that the Greek people denied on Sunday,” said Guillermo Hernandez Sampere, who helps manage about 150 million euros as head of trading at MPPM EK in Eppstein, Germany. “At the end of the day, the fear of a Grexit hasn’t affected the market too much. The recovery this morning was because of the fast money that was shorting during the week in expectations of a disappointment.”
Back-and-forth talks between Greece and its creditors have held back gains from the Stoxx 600. The gauge slid almost 10 percent from its April record through Tuesday. The Greek stock exchange will remain shut until July 13.
Banks Rally
Banks posted the biggest advance among 19 Stoxx 600 groups, with Banca Monte dei Paschi di Siena SpA and BNP Paribas SA adding at least 4.6 percent. DNB ASA jumped 5 percent after Norway’s biggest lender reported profit that beat analyst estimates.
The options market is signaling the longer-term cost of protecting against losses in lenders is near the cheapest since 2012 versus one-month contracts.
InterContinental Hotels Group Plc climbed 3.1 percent after agreeing to sell its Hong Kong hotel to a group of investors advised and managed by Gaw Capital Partners for $938 million. United Internet AG surged 6.5 percent after buying Polish website Home.pl and
EMS-Chemie Holding AG rose 3 percent after reporting an increase in first-half earnings. Tryg A/S gained 1.1 percent after posting better-than-forecast quarterly net income.
Source: Bloomberg – Spanish, French Stocks Lead Europe Rally as Greece Submits Plan
