Business Irish

Saturday 24 March 2018

European stocks rise on Greek deal optimism

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange. Photo: Reuters
Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange. Photo: Reuters

European stocks extended gains amid optimism that Greece has made progress on a debt deal with its creditors.

By mid-afternoon in Dublin, the ISEQ Overall Index was up 1.22pc or 76.33 points to end the trading session at 6,343.31.

The leaders on the Dublin market included hotel group Dalata, which increased 3.8pc to €3.79, while building materials firm CRH rose 3.3pc to €25.93.

On the other side of the board, the laggards included packaging giant Smurfit Kappa, which by mid-afternoon was down 1.5pc to €28.09, while insurance group FBD slipped 1.3pc to €9.27.

Elsewhere, the Stoxx Europe 600 Index added 1.1pc to 407.86 at 3.33 p.m. in London. Equities jumped after an official with knowledge of the matter said Greece and its creditors have started drafting a staff level deal to solve its debt crisis.

The ASE Index headed for its biggest gain in a month.

"Everyone was scared Greece was close to leaving the Eurozone," said John Plassard, vice president at Mirabaud Securities LLP in Geneva.

"We had bad news on Greece today and people now got excited by this, so just some hope is pushing the market up. They seem to be trying to do anything possible to keep Greece in the Eurozone."

Earlier, four international officials familiar with the matter said Greece will likely miss a deadline for a deal with creditors by the end of the week as the two sides make little progress in their talks.

Among stocks moving on corporate news, Imperial Tobacco added 3.5pc after Reynolds American got regulatory approval to sell its Winston, Kool, Salem and Maverick brands to the UK company.

IAG climbed 2.3pc after getting government permission to proceed with its €1.4bn takeover of Aer Lingus. Aer Lingus rose 2.6pc.

Assicurazioni Generali gained 2.4pc. Europe's third-largest insurer said it plans to increase dividends and boost cash flow to more than €7bn by 2018. CRH rose 2.8pc after finalising a deal to buy about €6.5bn of assets from Holcim and Lafarge.

In currencies, the dollar rose for a fourth day, the longest winning streak this quarter, as a growing set of improving economic data breathes new life into the greenback's rally.

The dollar is surging against most major currencies, reaching an almost eight-year high versus the yen, after Federal Reserve Chair Janet Yellen said last week she expects to raise interest rates this year.

April economic data from consumer prices to durable goods orders improved, suggesting the first-quarter US economic slowdown was temporary.

"It feels like after a couple of months of a lot of frustration with the dollar, people are getting some confidence that US data momentum can be turning higher again," Matt Derr, a foreign-exchange strategist at Credit Suisse said.

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