By Carla Mozee, MarketWatch
European stocks leapt Wednesday following reports debt-strapped
Greece is in the final stages of reaching a deal with its
international creditors.
The Stoxx Europe 600 closed up 1.3% at 408.88, breaking a
three-session losing streak, following comments from Greece's Prime
Minister Alexis Tsipras that suggested Athens may be closer to a
deal that would end the country's monthslong deadlock with
international creditors. Stocks started to surge following a
Bloomberg report that a draft for a technical-level agreement was
being written.
At the close of trading in Athens, the Athex Composite finished
higher by 2.6% at 851.81. Greek bond prices climbed, with the yield
on two-year debt dropping 1.7 percentage points to 22.83%. The
yield on 10-year debt fell 64 basis points to 11.03%. Bond prices
and yields move inversely.
There are fears that Greece is quickly running out of cash, and
creditors have been insisting Athens agree to certain economic
reforms before they release a fresh round of bailout funds. Market
sentiment has been weighed by concerns that if the two sides
couldn't reach an agreement that Greece would eventually have to
leave the eurozone.
Back to equities, Germany's DAX rose 1.3% to 11,771.13, after a
lackluster start to the session. France's CAC 40 gained 2% to
5182.53. The U.K. FTSE 100 in London ended 1.2% higher at 7033.33
(http://www.marketwatch.com/story/shares-rise-in-london-as-ma-deals-make-headway-2015-05-27).
The euro (EURUSD) turned modestly higher following the debt-deal
reports, trading at $1.0886 versus $1.0874 late Tuesday in New
York.
The Stoxx 600 on Tuesday fell 0.7%
(http://www.marketwatch.com/story/european-stocks-euro-under-pressure-as-greece-spain-niggle-2015-05-26)
as investors monitored developments in Greece's debt crisis, and as
the U.S. dollar (DXY) rebounded on revived interest rate-hike
speculation, crimping commodity stocks.
Data: There were mixed economic readings in Europe on Wednesday.
French consumer confidence
(http://www.marketwatch.com/story/french-consumer-confidence-slips-in-may-2015-05-27-4485296)slipped
in May, while German consumer sentiment is set to increase in June
(http://www.marketwatch.com/story/german-consumer-sentiment-set-to-rise-in-june-gfk-2015-05-27),
said GfK market research group.
"The weaker pace of economic growth aside, given the recent
demise in the euro and the low inflation climate, it is little
wonder that the German consumer mood is improving," said Ipek
Ozkardeskaya, market analyst at London Capital Group, in a
note.
Corporates: Among top performers on the Stoxx 600, Imperial
Tobacco Group rose 3.3%. The company is in line to buy four tobacco
brands
(http://www.marketwatch.com/story/reynolds-lorillard-tobacco-merger-cleared-by-ftc-2015-05-26)
stemming from the planned merger of Reynolds American Inc. (RAI)
and Lorillard Inc. (LO)
Stock in British Airways parent International Consolidated
Airlines Group SA tacked on 3.2% as the Irish government backed the
carrier's plan to buy Aer Lingus
(http://www.marketwatch.com/story/irish-govt-backs-iags-plan-to-buy-aer-lingus-2015-05-26)PLC
.
Beazley PLC gained 6.9%, and Hiscox Ltd. rose 3.5% after the
insurers were upgraded to overweight from neutral at Deutsche
Bank.
LVMH Moët Hennessy Louis Vuitton shares turned higher by 1.7%.
The French luxury-products maker late Tuesday said it is in
exclusive talks to purchase
(http://www.marketwatch.com/story/lvmh-in-talks-to-buy-le-parisien-newspaper-2015-05-27)
the Le Parisien/Aujourd'hui newspaper franchise from media company
Groupe Amaury.
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