Europe stocks move up as Greece, rates in focus

Traders work in front of the DAX board at the Frankfurt Stock Exchange. The DAX 30 index climbed 1.08% to 12,166.44 points yesterday.AFP/LondonEurope’s main stock markets closed higher yesterday, with London’s benchmark FTSE 100 index gaining 1.12% on the day to 7,105.36 points. Frankfurt’s DAX 30 index climbed 1.08% to 12,166.44 points, just shy of its record high, while the CAC 40 in Paris jumped 1.40% to 5,208.95 points, a seven-year high. In foreign exchange, the European single currency slid to $1.0736 from $1.0780 late in New York on Wednesday. “Athens has vowed to repay the IMF today and the market is optimistic the agreement will be honoured,” said David Madden, market analyst at IG trading group. Greece yesterday made a €459mn loan payment to the International Monetary Fund, an official said, with the country’s precarious finances having been closely monitored since the arrival of a new hard-left government in January. Later this month, Athens has to make interest payments of nearly €400mn and roll over €2.4bn in six- and three-month treasury bills due to mature on April 14 and 17. Athens on Wednesday raised €1.14bn in six-month treasury bills. Yesterday it announced the sale of another €625mn in three-month bills next week. Meanwhile, Portugal saw the yield on its two-year bonds briefly fall into negative territory on Thursday, joining Germany and France. The ECB’s €1.1tn bond buying programme has seen the rate of return for short and even medium-term sovereign debt fall into negative territory for several eurozone countries. That means investors are in effect paying money to lend to the countries, but given fears of deflation and market volatility, many investors consider the bonds as a safe haven investment. Attention among traders yesterday was also on the Federal Reserve. Minutes of the US central bank’s last policy meeting released late in New York on Wednesday showed a split over when interest rates should again start rising in the world’s biggest economy. According to the minutes of the March 17-18 meeting of the Federal Open Market Committee, “several participants” thought conditions were right for a June hike in the federal funds rate, which has been stuck near zero since late 2008. Others deemed the economy would not be able to weather a hike until later in the year, while “a couple” said liftoff would remain unlikely until 2016. US equities opened on the up side, with the Dow Jones Industrial Average climbing 0.31% to 17,957.96 in the first five minutes of trading. The broad-based S&P 500 climbed 0.26% to 2,087.21, while the tech-rich Nasdaq Composite Index advanced 0.39% to 4,970 20.