Positive Greek outlook pushes stocks higher

European stock markets closed higher yesterday as investors took heart from the latest comments on the Greek debt crisis and positive US economic data, analysts said.

German investors shrugged off news that the country’s President, a largely ceremonial position, had stepped down as he seeks to deal with a dogged corruption probe.

In London, the FTSE 100 index gained 0.33 per cent to close at 5,905.07 points, the Paris CAC 40 added 1.37 per cent to 3,439.62 points and Frankfurt’s DAX 30 rose 1.42 per cent to 6,848.03 points.

German investors shrugged off news that the President had stepped down

“Markets are hopeful that the negotiations regarding the Greek debt swap talks and bailout package can be concluded next week when the Eurozone finance ministers meet” on Monday, a research note from VTB Capital said.

In New York, Wall Street was mixed as investors waited to see whether Greece will get its bailout deal after many delays and alarms.

The Dow Jones Industrial Average was up 31.41 points or 0.24 per cent at 12,935.49 points while the tech-heavy Nasdaq Composite lost 3.34 points or 0.11 per cent to 2,956.51 points.

“The emergence of a timetable for successfully agreeing the Greek bailout has settled some nerves and boosted risk appetite, though clearly investors look on cautiously considering the scale of previous disappointments and hot air resolutions,” City Index analyst Fiona Cinotta said.

The European single currency firmed to $1.3150 from $1.3132 in New York late on Thursday, when it fell as low as $1.2974 – the lowest point since January 25 – on intensifying fears of a Greek default.

The dollar rose as high as 79.18 yen, the highest level since October 31, as risk appetite improved following the Japanese central bank’s monetary easing earlier this week.

“It is very difficult to assess whether a (Greek) default has already been priced in or that the market just expects Greece to struggle through to survive another day, as this has been the case a few times during this debt crisis,” Spreadex trader Jordan Lambert said.

France yesterday condemned as “irresponsible” any suggestion Greece might default on its debt, following reports that some officials in Germany and northern Europe were mulling that possibility.

Asked on RTL radio whether Germany, Finland and the Netherlands might prefer to see Greece bankrupt than to continue to bail it out, Prime Minister Francois Fillon said “everything must be done” to avert such an outcome.