Europe markets close higher on Greek hopes

Visitors pass a sign inside the London Stock Exchange headquarters. The FTSE 100 index of top blue-chip companies finished 0.91% higher to 6,490.70 points yesterday.

AFP/LondonEuropean stocks finished higher yesterday, despite heavy losses in China, on hopes of a resolution to the Greek crisis after European leaders gave Athens a deadline to submit new bailout reform proposals. British equities also forged higher on the budget presented to parliament yesterday by finance minister George Osborne, which outlined new austerity measures. London’s benchmark FTSE 100 index of top blue-chip companies finished 0.91% higher to 6,490.70 points. Frankfurt’s DAX 30 gained 0.66% to 10,747.30 and the CAC 40 in Paris rose 0.75% to 4,639.02 compared with Monday’s close. “European markets have tiptoed higher as the eurozone lays down the law, indicating that Greece must fall into line by Sunday or get ready to exit the currency union,” said analyst Chris Beauchamp at trading firm IG. “Investors can hardly be blamed for treating the news with caution, given Greece’s inability to deliver the goods at previous crucial points in this crisis.” In foreign exchange on Wednesday, the euro advanced to $1.1069 from $1.1011 late in New York on Tuesday. Eurozone leaders have ordered Greece to submit detailed bailout reform proposals by today, while warning they had drawn up contingency plans in case it does not meet expectations. Greek Prime Minister Alexis Tsipras vowed yesterday to present “credible” reform plans before that deadline. All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that could save Greece’s moribund economy, or possibly lead it to exit the eurozone. “European equities (are) positive (which) suggests hope of progress before the weekend deadline,” noted Mike van Dulken, head of research at Accendo Markets. The eurozone’s bailout fund said Greece had formally submitted a request for a new aid programme, just days before the deadline. Athens meanwhile raised €1.6bn ($1.8bn) in a sale of six-month treasury bonds at a rate of 2.97%, unchanged from the last issue a month ago. Back in London, Britain’s Barclays saw its share price surge by more than 3% at one stage after the scandal-hit banking giant sacked its chief executive Antony Jenkins. In recent years, Barclays has been blighted by a series of scandals, facing vast fines over its role in forex and Libor rigging affairs. Barclays management has “concluded that new leadership is required” to accelerate an overhaul of the beleaguered group, it revealed in a surprise statement. Jenkins has left the group with immediate effect, a spokesman confirmed. Barclays shares closed at 257.30 pence, up 2.04% from Monday. Across in Asia, meanwhile, equities tumbled as a collapse in Chinese shares began to contaminate other markets in the region. Shanghai plunged 5.90%, despite Chinese leaders announcing fresh measures to staunch a correction that has wiped trillions off the country’s markets. Hong Kong tanked 5.84% to 23,516.56 - its lowest close since the start of January. Tokyo sank 3.14%, Seoul slipped 1.18% and Sydney retreated 2.01%. Shanghai is down more than 30% from its closing peak on June 12, when it had risen by more than 150% in 12 months in a borrowing-fuelled frenzy enhanced by hopes for economy-boosting government measures. The New York Stock Exchange suspended trading in all stocks yesterday morning after posting initial losses as fears the big drop in the Chinese equity markets amplified concerns about the world’s second-biggest economy. The NYSE halted trading at 1532 GMT, saying in a notice on its website that “additional information will follow as soon as possible.” An NYSE statement cited “technical issues,” CNBC reported. Prior to the suspension, the Dow Jones Industrial Average was down 1.15% at 17,573.23 points, while the tech-rich Nasdaq Composite Index was trading down 1.39% to 4,927.89.