President of the Capgemini Paul Hermelin gives a press conference at the company headquarters in Paris. Shares in the French IT services and consulting company surged over 7.87% to close at €84.54 topping the CAC 40 leaderboard after announcing a key US acquisition.
AFP
London
Europe’s main stock markets rebounded strongly yesterday on optimism that stalled Greek debt talks would get on track after Athens shook up its negotiating team.
London’s benchmark FTSE 100 advanced 0.47% to hit a new record close of 7,103.98 points driven by more upbeat news from Greece and banking shares.
Frankfurt’s DAX 30 index jumped 1.93% to end the day at 12,039.16 points, while in Paris the CAC 40 rose 1.30% to 5,268.91.
In Greece, the Athex Composite Index soared 4.37% on the positive market sentiment, which also spread to Madrid, up 1.17%, and Milan climbing 1.62%.
The naming of a new team to negotiate with Greece’s EU-IMF creditors showed some “solid progress” and with the role of Greek Finance Minister Yanis Varoufakis in the talks reportedly relegated “the interpretation of this is that progress can only accelerate from here,” said Tony Cross, Trustnet Direct’s market analyst.
“If the Syriza-led government of Alexis Tsipras want to progress in negotiations and avoid default, it’s probably the right move to put its finance minister on the proverbial chopping block. After three months of attempting to reach a better deal for Greece and roll back austerity, Varoufakis has only succeeded in frustrating creditors,” added Jasper Lawler, market analyst at CMC Markets.
The Greek government in a statement yesterday announced that a “political negotiation team” would be formed under junior foreign minister Euclid Tsakalotos, a 55-year-old Dutch-born economics professor, to assist the troubled talks after months of fruitless discussions on Athens’ new loan deal.
A government source claimed that the changes did not affect Varoufakis, who will be in charge of Tsakalotos’ “political team”, and the radical-left government insisted it would continue to support the maverick minister against “manipulated” media attacks.
In foreign exchange activity, the euro rose to $1.0909 from $1.0873 late in New York on Friday.
In Paris, shares in French IT services and consulting company Capgemini surged over 7.87% to close at €84.54 topping the CAC 40 leaderboard after announcing a key US acquisition.
Capgemini revealed it was buying New Jersey-based IGATE for $4bn (€3.7bn), boosting US-generated business to nearly a third of its total activity.
A main mover in London was global bank HSBC, gaining 3.11% to close at 649.30 pence on media speculation over a potential divestment.
“HSBC is leading the pack, with weekend reports that it is considering spinning off its UK retail arm lifting sentiments here,” said Trustnet’s Cross in London.
The stock had already jumped 2.96% on Friday after HSBC launched a review on whether to remain headquartered in Britain, as the country increases regulation and taxation of the sector.
US stocks however slumped yesterday after opening higher following last week’s record-breaking rally.
At mid-day in New York, the Dow Jones Industrial Average was flat off 0.01% at 18,077.51 points, while the S&P 500 index was down 0.16% at 2,114.27 points. The broad-market index had squeaked into record territory Friday.
The tech-rich Nasdaq Composite Index fell 0.42% to 5,070.48 points, after setting a fresh record for a second day Friday.
Apple was up 2% ahead of its first earnings report as a member of the blue-chip Dow. The tech giant is to report second-quarter earnings after the markets close.
