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European stocks rally on Greek deal hopes

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Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt. Photo: Reuters

Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt. Photo: Reuters

REUTERS

Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt. Photo: Reuters

European stocks posted their biggest four-day rally since January as the region's leaders agreed that Greece's government was getting serious about reaching a deal.

The Stoxx Europe 600 Index rose 1.2pc to 398.83 at the close of trading.

A report showed euro-area factory and services expanded more than forecast in June, signalling a pickup in the region's economy amid quantitative-easing measures by the European Central Bank.

By the close in Dublin, the ISEQ Overall Index was up 0.82pc or 52.07 points to end the trading day at 6,385.74.

The leaders on the Dublin market included fruit company Fyffes, which was up 2.2pc to €1.38, while building materials firm CRH rose 1.9pc to €27.10.

On the other side of the board, the laggards included packaging giant Smurfit Kappa, which fell 0.5pc to €26.68, and Ryanair, down 1.7pc to €12.02.

European leaders agreed to step up talks and gave Greece's country's government 48 hours to make the final push to win aid.

Shares jumped yesterday after Greece proposed a new set of reforms. The plans represent a step forward, German Chancellor Angela Merkel said last night.

The ASE Index climbed 6.1pc yesterday, completing its best four-day gain since February.

"The base case is that Greece will be saved and kept in the euro in a last-minute deal," said Daniel Weston, chief investment officer of Aimed Capital in Munich, Germany.

"Irrespective of the Greek rhetoric, European growth is on the rebound and inflation has shown very early signs of a rise, indicating that QE is working and being risk-on is still the place to be." Among shares active on corporate news, Air France-KLM Group climbed 2.1pc after the Dutch government said it could buy shares of the company if necessary.

Irish Independent