Europe’s main stock markets rose strongly on Tuesday on hopes of a second international bailout for Greece, but investors remained cautious over an easing in the eurozone debt crisis.
Sentiment was also boosted by bumper gains across Asia, where Japan published impressive factory output data. London’s benchmark FTSE 100 index of top shares added 0.97 percent to 5,996.59 points, following a bank holiday the previous day.
Frankfurt’s DAX 30 gained 1.99 percent at 7,302.58 and in Paris the CAC 40 won 1.48 percent to 4,007.73 points. “So another little bounce ... as investors price in the full expectation of another bailout for Greece next month,” said Capital Spreads analyst Simon Denham.
“There’s little chance that they will be able to repay their bond holders come mid-July, where a default was inevitable, and so now they know further aid is in the pipeline. “The concern is that the money will just be frittered away and over the extended week end Greece’s opposition party rejected the Prime Minister’s austerity package.
“This is the major problem and if Germany keeps throwing good money after bad, there’s little incentive for the Greeks to eradicate the debt burden.” Eurozone junior finance ministers will meet Wednesday in Vienna to go over Greece’s debt problems, including the possibility of fresh aid, a European source told AFP on Tuesday.
Greek officials are currently locked in negotiations with representatives from the three organisations which last year bailed out the country with a 110-billion-euro ($157-billion) loan. Athens needs a scheduled instalment of the loan, worth 12 billion euros, to pay its bills in July. But the IMF has threatened to withhold its share of the funding without a broader agreement that will make Greece’s debt — over 350 billion euros — sustainable. “Sentiment over Greece has been swinging between optimistic and negative like a see-saw for much of the last few months,” said City Index strategist Joshua Raymond.
He added: “A second bailout buys Greece time, but the market must be convinced that this will be the final time such a requirement is needed and until then, sentiment over sovereign debt within the eurozone is likely to remain fragile.” Asian stocks surged earlier on Tuesday, with Tokyo boosted by data showing factory output lifting last month, raising hopes for Japan’s recovery from the March 11 earthquake and tsunami. But the yen tumbled against the dollar and euro after Moody’s warned that it may cut Japan’s debt rating. Tokyo jumped 1.99 percent to finish at 9,693.73 points, its best percentage jump since March 30. Hong Kong soared 2.17 percent, Sydney added 0.87 percent and Shanghai leapt 1.37 percent.
Sentiment was also boosted by bumper gains across Asia, where Japan published impressive factory output data. London’s benchmark FTSE 100 index of top shares added 0.97 percent to 5,996.59 points, following a bank holiday the previous day.
Frankfurt’s DAX 30 gained 1.99 percent at 7,302.58 and in Paris the CAC 40 won 1.48 percent to 4,007.73 points. “So another little bounce ... as investors price in the full expectation of another bailout for Greece next month,” said Capital Spreads analyst Simon Denham.
“There’s little chance that they will be able to repay their bond holders come mid-July, where a default was inevitable, and so now they know further aid is in the pipeline. “The concern is that the money will just be frittered away and over the extended week end Greece’s opposition party rejected the Prime Minister’s austerity package.
“This is the major problem and if Germany keeps throwing good money after bad, there’s little incentive for the Greeks to eradicate the debt burden.” Eurozone junior finance ministers will meet Wednesday in Vienna to go over Greece’s debt problems, including the possibility of fresh aid, a European source told AFP on Tuesday.
Greek officials are currently locked in negotiations with representatives from the three organisations which last year bailed out the country with a 110-billion-euro ($157-billion) loan. Athens needs a scheduled instalment of the loan, worth 12 billion euros, to pay its bills in July. But the IMF has threatened to withhold its share of the funding without a broader agreement that will make Greece’s debt — over 350 billion euros — sustainable. “Sentiment over Greece has been swinging between optimistic and negative like a see-saw for much of the last few months,” said City Index strategist Joshua Raymond.
He added: “A second bailout buys Greece time, but the market must be convinced that this will be the final time such a requirement is needed and until then, sentiment over sovereign debt within the eurozone is likely to remain fragile.” Asian stocks surged earlier on Tuesday, with Tokyo boosted by data showing factory output lifting last month, raising hopes for Japan’s recovery from the March 11 earthquake and tsunami. But the yen tumbled against the dollar and euro after Moody’s warned that it may cut Japan’s debt rating. Tokyo jumped 1.99 percent to finish at 9,693.73 points, its best percentage jump since March 30. Hong Kong soared 2.17 percent, Sydney added 0.87 percent and Shanghai leapt 1.37 percent.
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