World Economy

Stocks Leap to Multi-Year Highs

Stocks Leap to Multi-Year HighsStocks Leap to Multi-Year Highs

Stocks stormed to multi-year highs on Wednesday as investors shrugged off the uncertainty over Greece’s debt negotiations with its creditors, pinning their hopes that a deal will be reached by the end of the week.

The Greek government said it will request a loan extension for up to six months from its creditors on Thursday morning, although Germany said there will be no such deal unless Greece sticks to the terms of its current bailout.

The European Central Bank, meanwhile, is expected to announce later in the day that it won’t cut off emergency funding for Greek banks, a source told Reuters.

Europe’s main bourses followed Asia and Wall Street higher. The FTSEuroFirst 300 index of leading European shares rose 0.8 percent to a fresh seven-year high of 1,516 points, and Britain’s FTSE 100 hit a 15-year high of 6,921 points.

The flip side of investors’ appetite for risk saw increased selling of core government bonds, pushing the yield on benchmark 10-year US Treasuries to its highest since the first trading day of the year.

“While the political situation in Greece remains volatile, the economic and financial situation is more under control,” said Andreas Clenow, hedge fund trader at ACIES Asset Management. “I still see a bull market on stocks, and I have been buying into weakness on the Euro STOXX.”

France’s CAC 40 .FCHI share index climbed 1 percent to its highest since June 2008, and Germany’s DAX .GDAXI rose 0.5 percent to within a whisker of its record high set earlier this month. European financials were among the biggest gainers, up 2 percent.

Greek stocks got back some of this week’s losses to trade 2 percent higher. Curiously, the Athens index is outperforming both the Dow Jones Industrial Average and S&P 500 so far this year.


Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS rose 0.2 percent.

Japan’s Nikkei rose 0.9 percent to its highest since July 2007. There was little reaction to the Bank of Japan’s well-anticipated decision to stand pat on monetary policy and maintain its massive stimulus.

The FTSE 100 gave back its gains to trade flat on the day, while sterling jumped almost 1 percent to a seven-year high of 73.65 pence per euro.

In bonds, Italian and Spanish 10-year yields both fell around 5 basis points, and three-year Greek yields fell around 100 basis points to 17.7 percent.