European stocks gain amid Greek bailout deal hopes
European stocks extended gains by mid-afternoon yesterday after Greece said it was prepared to accept creditors' bailout proposals with some changes.
The Stoxx Europe 600 Index added 1.9pc to 388.69 at 2.45pm in London. Holland's AEX Index and Germany's DAX Index led gains, rising at least 2.5pc. Greece has already missed a €1.6bn payment to the International Monetary Fund, after last-ditch overtures to creditors were rebuffed, and is headed for a referendum on Sunday on austerity as a condition for aid.
By mid-afternoon in Dublin, the ISEQ Overall Index was up 1.92pc or 118.48 points to 6,283.52.
"It seems they are on their way towards some type of a deal," said Otto Waser, chief investment officer at R&A Research & Asset Management in Zurich.
"It's a first step, and if they decide there is room for negotiation, the markets will stay up. One percent of the advance is just a rebound from previous days' losses and the rest because of this new proposal.
"Ultimately, Greece will stay in the euro."
In a letter to European Commission President Jean Claude Juncker, European Central Bank President Mario Draghi and IMF Managing Director Christine Lagarde, Greek Prime Minister Alexis Tsipras accepted the proposals as a basis for compromise to end a standoff over its bailout. He also signalled sticking points remain on pensions and tax discounts to Greek islands.
Greece's creditor institutions still view the referendum as an issue for reaching a deal, according to an EU official. German Chancellor Angela Merkel has refused to engage until after the vote.
Eurozone finance ministers met yesterday to weigh the proposals from Tsipras, while ECB policy makers discussed whether to maintain their emergency lifeline.
The leaders on the Dublin market included bookmakers Paddy Power, which increased 2.1pc to €78.50, while building materials group CRH rose 2.2pc to €25.88.
On the other side of the board, the laggards included drinks group C&C, which fell 0.5pc to €3.50, while fruit company Fyffes slipped 2.8pc to €1.37.
Elsewhere, car-related companies posted the biggest increase of the 19 industry groups on the Stoxx 600, with Daimler and Volkswagen contributing most to the advance with gains of at least 3.8pc.
Among stocks moving on corporate news, Airbus Group rose 4.7pc after winning an order from China for as many as 75 A330 jets worth $18bn at list prices.
Serco Group jumped 6.5pc after saying that trading in the year to date has been better than anticipated.
Commerzbank AG advanced 2.5pc after selling €2.9bn of commercial real estate loans to Oaktree Capital Group and JPMorgan Chase & Co.