European stocks rise on Greek bailout hopes

European stock markets rose yesterday on confidence that a new bailout for Greece will finally be approved while sentiment got a boost from the latest Chinese move to ease credit.

Trading was quiet in anticipation that the eurozone finance ministers talks could go on late and with US markets closed for the President’s Day holiday.

At close, London’s benchmark FTSE 100 index gained 0.68 per cent to 5,945.25 points, Frankfurt’s DAX 30 rose 1.46 per cent to 6,948.25 points and in Paris the CAC 40 added 0.96 per cent at 3,472.54 points.

Elsewhere in Europe, Madrid rose 1.86 per cent, Lisbon 0.45 per cent, Amsterdam 1.42 per cent and Brussels put on 1.03 per cent.

The European single currency advanced to $1.3256 from $1.3141 in New York late on Friday, gaining ground as investors became more willing to take risks.

The dollar was at 79.48 yen, down slightly from 79.54 on Friday.

“The markets are waiting to learn more on Greece even though it looks like things are progressing well,” broker Yves Marcais of Global Equities said. “We’re never safe from a bad surprise,” he said, adding that trading volume was predictably low because of the US holiday closure.

Eurozone finance ministers were meeting in Brussels, seemingly agreed on tighter conditions to approve a massive rescue and avert an imminent default.

Greek Prime Minister Lucas Papademos joined talks among eurozone finance ministers to secure a €130-billion bailout and a writedown on privately-held debt worth €100 billion.

Greek Finance Minister Evangelos Venizelos said: “I am optimistic but in any case we need clear political approval from the Eurogroup.”

“We have all the elements for an accord,” French Finance Minister Francois Baroin said ahead of the talks that began at 1500 GMT. “That is what I will argue as finance minister this evening.”

However, entering the talks, Dutch Finance Minister Jan Kees De Jager demanded that the EU and IMF take “permanent” control of government decision-making over revenues and public expenditure in Greece.

Marathon negotiations have lasted for six months and have been on a knife edge in the last few weeks, with Greece appearing to totter between a rescue and eviction from the eurozone.

Most analysts consider that if Greece were to default, the consequences for the Greek people would be catastrophic, but possibly not now so dangerous for the rest of the eurozone as would have been the case last year.