World Economy

Eurozone Stocks Rise on Optimism Over Greek Bailout

Eurozone Stocks Rise on Optimism Over Greek BailoutEurozone Stocks Rise on Optimism Over Greek Bailout

European stocks pushed into the green on Friday after creditors offered Greece an extension to its bailout with an additional €12 billion ($13.4 billion) to keep it from defaulting.

The CAC 40 in Paris rose 0.88% to 5,086.02 points and Frankfurt’s DAX 30 added 0.37% to stand at 11,515.50 in afternoon trading. Athens’ main index climbed 0.53% to 785.82 points and Milan gained 0.79%, AFP reported.

Outside the eurozone, London’s benchmark FTSE 100 index dropped 0.46% to stand at 6,776.70 points.

Greece’s international creditors on Friday offered Athens a five-month, €12 billion extension of its bailout program but said it must seal a deal this weekend to avoid an IMF default next week.

Angela Merkel and Francois Hollande discussed financing plans with leftist Greek Prime Minister Alexis Tsipras on the eve of a “decisive” meeting of eurozone finance ministers aimed at finding a deal to end the crisis.

The plan would include an immediate disbursement of €1.8 billion to help Greece meet a payment of €1.5 billion due to the IMF on Tuesday.

Without help, Greece will likely default on that payment, setting off a process that could end with a messy exit from the eurozone and even the EU.

Tsipras did not directly reject the offer but said: “Europe’s principles are not based on blackmail and ultimatums.”

In foreign exchange, the euro edged down to $1.1182 from $1.1206 late in New York on Thursday.

Away from Greece, Britain’s biggest retailer, supermarket group Tesco, shot to the top of London’s FTSE after it reported improving numbers following a record annual loss.

“Although Tesco has seen (quarterly) sales drop by 1.3% this is better than expected and an improvement on last year’s fall of 4.0%,” noted Alastair McCaig, market analyst at IG trading group.

Tesco, whose shares rallied 3.65% to 225.70 pence in Friday trading, is seeking to overhaul its business after reporting the biggest annual loss in its almost 100-year history of £5.74 billion ($9.03 billion) in the year through February.

Britain’s largest retailer is also facing a fraud probe after a huge accounting scandal that saw it overstate profits by £263 million due to errors stretching back to before 2013.

Meanwhile in Paris on Friday, shares in Air France-KLM climbed 0.73% to €6.53 after its Air France unit denied a report that it was preparing to lay off 3,300 employees as part of continuing cost cutting at the French flag carrier.

 Shanghai Stocks Slump

Asian markets sank again Friday as Greek talks dragged out, while Shanghai collapsed on fears Chinese stocks are overvalued after a year-long advance.

Shanghai plunged 8.5% at one point, its biggest loss in eight years, as investors that had flooded the market on margin trading–borrowing cash to buy stocks–ran for the door.

Chinese equities, which more than doubled in value in the year to June 12, eventually closed down 7.40%, or 334.91 points, at 4,192.87, its lowest point since the start of May.

The benchmark index has fallen almost a fifth in two weeks, having soared more than 140% in the previous 12 months. Hong Kong lost 1.78%, Sydney shed 1.54%, and Tokyo slid 0.31%.

Meanwhile Seoul added 0.25 on hopes that a new $14 billion stimulus package would help boost the sagging economy, which has been hit by the deadly MERS outbreak.

US stocks opened mixed, with the Dow Jones Industrial Average rising 0.32% to 17,948.22 in the first five minutes of trading.

The broad-based S&P 500 edged up 0.06% to 2,103.67, while the tech-rich Nasdaq Composite Index dropped 0.13% to 5,105.43.