Shares rise despite violence on Greek streets and default fears
Published 06/10/2011 | 05:00
RIOT police fired teargas at stone-throwing youths in central Athens yesterday as thousands of striking public sector workers marched against the Greek government's cuts.
Shares rose on both sides of the Atlantic on hopes that European officials were moving forward with plans to help struggling European banks.
Youths broke up marble paving slabs in central Syntagma Square and hurled the chunks at police in full riot gear. The police responded by firing teargas grenades and chasing protesters through the square and into surrounding streets.
Flights were grounded, schools shut and government offices closed in Greece's first nationwide walkout in months.
Union leaders called it the start of a campaign to derail emergency austerity steps launched last month by a government that has already imposed two years of tax hikes and wage cuts.
Police said at least two police and two civilians were hurt and 12 people detained. Violence was far milder than in June, when 100 people were hurt in battles between demonstrators and police in Syntagma Square.
Private-sector workers did not participate in the strike but will take part in a bigger general strike in two weeks' time.
Many in the Greek private sector resent perks of state workers, who are protected from lay-offs by the constitution.
European and US shares shrugged off news of the clashes and fears of a Greek default. Most exchanges posted gains after policymakers agreed to strengthen the continent's struggling banking sector and a better-than-expected report on the US service sector boosted optimism about US growth.
The DAX climbed 4.9pc in Frankfurt, the CAC 40 closed up 4.3pc in Paris and the UK's FTSE 100 advanced 3.2pc. In Dublin, the ISEQ closed up 2.1pc. In the US, the biggest gains were seen on the Nasdaq which outperformed the other two major indexes.
Investor confidence was buoyed by comments from German Chancellor Angela Merkel who said her government was ready to capitalise its banks if needed.
Among the banks to feature in the top movers' list were French banks Credit Agricole and BNP Paribas which rose 9.9pc and 8.5pc respectively.
Credit Agricole and BNP Paribas tumbled in the preceding three days on worries that the debt crisis could spark a funding squeeze. (Reuters)