Wednesday 21 February 2018

Greek stocks rally amid ECB liquidity report

Ryanair chief executive Michael O’Leary.
Ryanair chief executive Michael O’Leary.

European shares fell yesterday but Greek stocks rallied amid a report that the country had won access to more emergency funding from the European Central Bank for its banks.

By mid afternoon in Dublin, the ISEQ Overall Index was down 0.65pc or 41.06 points to 6,264.15.

The leaders included Ryanair, which was up 0.5pc to €11.42 by mid afternoon, while insulation group Kingspan had increased 0.5pc to €18.59.

Aer Lingus was up 0.8pc to €2.42. On the other side of the board, the laggards included packaging giant Smurfit Kappa, which was down 1.3pc to €28.15.

Drinks group C&C had dropped 0.3pc to €3.78 by mid afternoon.

Elsewhere, the Stoxx Europe 600 Index declined 0.3pc by lunchtime in London after earlier rising as much as 0.6pc and falling 0.8pc.

Greece's benchmark ASE Index climbed 0.8pc, the most among western-European markets, with its banks heading for their biggest gains in a month. Drops in Kering and Tesco dragged Stoxx 600 retailers lower.

"Positive news is priced in and everyone is waiting for more good news," said Christian Stocker, a strategist at UniCredit Bank in Munich.

"What we now need is a strong increase in earnings momentum."

Greece's ASE rose after closing at its lowest level since 2012, and its banks jumped 8.7pc, rebounding from a record low.

The ECB's Governing Council raised the cap on Emergency Liquidity Assistance by about €1.5bn to €75.5bn in a teleconference yesterday, sources said.

The dollar weakened yesterday as signs Greece and its creditors were moving closer to an agreement boosted demand for riskier assets.

The US currency declined the most against Australia's dollar after inflation in the latter rose more than economists forecast, prompting traders to pare bets on further rate cuts from the Reserve Bank of Australia.

Greek Finance Minister Yanis Varoufakis said late on Tuesday that there were narrowing differences between the Government and Eurozone officials and that neither "will let the opportunity slip to arrive at an agreement."

Finance Minister Michael Noonan said yesterday that he didn't expect any decisions to be made until Finance ministers from Europe meet in Brussels next month.

"I'm going out to Riga for a meeting of the Eurogroup on Friday morning but it seems now that while some progress has been made, there won't be a series of crystallising decisions made until the May meeting," the minister said.

The Greek government's looming cash crunch initially weighed on local markets as Greek stocks hit a three-year low and the two-year bond yield hovered around 30pc. But by midday both stocks and bonds were higher.

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