World Economy

Greek Optimism Raises European Shares

Greek Optimism Raises European Shares Greek Optimism Raises European Shares

Greece faces a critical 24 hours as European leaders hold an emergency summit that could break the deadlock around the country’s debt crisis.

Greek PM Alexis Tsipras said he hoped Greece would “return to growth within the eurozone”. But European ministers have said there is still no basis for making a decision for aid for Greece on Monday, BBC reported.

On Sunday, Tsipras set out new proposals to try to prevent a default on a €1.6 billion $1.8 billion) IMF loan. But he has ruled out pension cuts, higher power rates, and an excessive budget surplus.

As a glimmer of hope emerged for some progress on Greece’s debt crisis after months of wrangling with international creditors, European shares hit their highest level in over a week.

Blue-chip indexes in London, Paris and Frankfurt were all up between 1.4 and 2.8 percent at 0752 GMT, with the telecoms sector outperforming after a takeover bid for France’s Bouygues Telecom reignited hopes for more corporate deals, Reuters reported.

Athens’ standoff with international creditors has weighed on markets in recent months, rubbing the shine off European stocks after a rally driven by the European Central Bank’s pledge to buy bonds to revive economic growth.

The pan-European FTSEurofirst 300 index was up 1.9%. The VSTOXX measure of European stock-market volatility slumped to its lowest level in 10 days.

“We remain of the view that the most likely outcome (with a 75% probability) is a deal,” Credit Suisse analysts said in a note to clients.

“An unfortunate but predictable feature of European crisis decision-making is that such deals are only ever made at the last minute, “at the edge of the abyss”. That’s Monday.” Greek stocks were up 6.8%, with the local banking sector jumping 15%. Greek banks have been at the heart of the recent market sell-off, with investors worried that capital controls may end up being introduced to fight deposit outflows.

“(Monday) promises to be a crazy trading session,” said IG strategist Chris Weston. Some 71% of all open trading positions held by IG clients are bets the German DAX index will rise, he said.

The top gainers of the day among European shares were telecom stocks, with Bouygues up 14.6% after Monday’s confirmation of a takeover bid from Altice via its Numericable-SFR subsidiary, which itself rose 14.5%. British broadcaster Sky also gained after the Sunday Telegraph reported that the Murdoch family was said to have rebuffed two offers for its stake.

Deal hopes were also alive in the world of confectionery: UK chocolatier Thorntons jumped by a whopping 42% after Ferrero International SA offered to buy the company at a premium of about 42.9% to its closing share price on Friday.