Pedestrians walk past a branch of the Royal Bank of Scotland in London. Shares of the bank rose 3.19% yesterday.
AFP/London
European stock markets rebounded yesterday, with Greece proposing a reworked deal closer to the position of its creditors as Athens continued to seek a bailout that would keep it in the eurozone.
The CAC 40 in Paris climbed 1.94% to 4,883.19 points and Frankfurt’s DAX 30 jumped 2.15% to 11,180.50 points.
Madrid won 1.32% and Milan gained 2.21%, while the Athens stock markets remained shut.
Outside the eurozone, London’s benchmark FTSE 100 index of top companies rose 1.34% to end the day at 6,608.59 points.
In foreign exchange, the euro slid to $1.1084 from $1.1139 late in New York on Tuesday.
“Greek Prime Minister (Alexis) Tsipras offered enough hope to spring a relief rally by suggesting Greece would meet most of the demands of its creditors in the most recent proposal,” said CMC Markets UK analyst Jasper Lawler.
The Greek government confirmed yesterday it had sent an “amended” proposal to its international creditors in the hope of sealing a deal to stave off financial ruin.
A letter sent by Tsipras to the EU, ECB and IMF on Tuesday evening asked for “a new agreement that regulates the country’s financing issues through the European Stability Mechanism (ESM), to ensure debt sustainability by focusing on growth,” a government source said.
However German Chancellor Angela Merkel responded swiftly that Germany won’t enter into new aid negotiations with Athens before Greece’s weekend referendum, while her deputy urged the left-wing government to cancel the plebiscite.
In a televised national address yesterday Tsipras called on Greeks to vote ‘No’ in a weekend referendum on the creditor’s last bailout proposals.
He rebutted efforts by EU officials to paint a ‘No’ vote as a rejection of Europe and the euro, saying instead it would help Greece’s position in further negotiations.
Banks’ share prices rose strongly, with Royal Bank of Scotland up 3.19%, Commerzbank winning 2.66% and BNP Paribas increasing its value by 2.25% from Tuesday’s close.
European indices had slid on Tuesday, extending heavy losses seen at the start of the week, as hopes faded of a last-minute deal to stave off Greece defaulting on its payment to the International Monetary Fund.
Greece on Tuesday failed to make a €1.5bn payment to the International Monetary Fund, becoming the first industrialised country to do so.
On the same day, the European portion of the international bailout keeping the Greek economy afloat formally expired.
“Investors are still hopeful of a positive outcome,” said Mike van Dulken, head of research at Accendo Markets.
Yesterday meanwhile marked the start of the third quarter after a volatile six months’ trading for Europe’s stock markets.
“It’s not been a good quarter for European markets, posting fairly hefty falls, after a spectacular start to the year but they still remain (mostly) in positive territory for the year,” said Michael Hewson, chief market analyst at CMC Markets UK.
Hewson noted however that London’s FTSE 100, consisting of major energy and mining companies, had been additionally weighed down by lower commodity prices this year.
Wall Street pushed higher on data showing US private-sector hiring accelerated in June.
The Dow Jones Industrial Average was up 0.66% to stand at 17,736.42 points in afternoon trading.
The broad-based S&P 500 rose 0.60% to 2,075.41 and the tech-rich Nasdaq Composite Index gained 0.55% to 5,014.49.
US businesses added 237,000 jobs last month, up from 203,000 in May and the best level since December, according to payroll firm ADP.
