Thursday, 16 July 2015 19:55
LONDON: Europe’s main stock markets advanced Thursday, mirroring gains in Asia, after Greek lawmakers voted in favour of an austerity-laden bailout package, and as the European Central Bank increased emergency funding to Greece’s teetering banks.
In mid-afternoon deals, London’s benchmark FTSE 100 index rose 0.63 percent to 6,795.98 points.
Frankfurt’s DAX 30 added 2.01 percent to 11,771.57 points and the CAC 40 in Paris won 1.63 percent to 5,129.24 points compared with Wednesday’s close.
The Greek parliament backed a deeply contentious bailout package earlier Thursday, clearing the first hurdle towards securing rescue funding hours before eurozone ministers resumed talks, but leaving the radical left government in Athens weakened.
Prime Minister Alexis Tsipras managed to push through a series of unpopular reforms demanded by the country’s international creditors despite opposition by some members of his leftist Syriza party, while on the streets of Athens anti-austerity protests turned angry as demonstrators threw firebombs at police.
“The Greek parliament put the ball back in the court of its creditors last night by voting through last weekend’s deal amidst a mini-Syriza rebellion and riots in Athens,” said analyst Connor Campbell at trading firm Spreadex.
In foreign exchange deals, the euro dipped to $ 1.0891 from $ 1.0947 late on Wednesday in New York, after Federal Reserve chief Janet Yellen reaffirmed a US interest rate hike by year-end.
“The dollar index rallied to a six week high as Fed chair Janet Yellen once again reaffirmed the central banks outlook for a 2015 rates rise… (and) signalled at improving economic confidence and a buoyant labour market for the decision to prime markets for an increase in US interest rates over the coming months,” said Kash Kamal, senior research analyst with Sucden Financial Research.
– Emergency funding increased –
During a regular policy meeting Thursday, the ECB governing council decided to increase its Emergency Liquidity Assistance (ELA) funding to keep Greek banks afloat, following the conclusion of a vital reforms-for-bailout deal that was concluded Monday.
The ECB — which has repeatedly increased maximum ELA funds as the Greek crisis hardened — said it would add another 900 million euros ($ 977.5 million) above the total reserve that had been limited to 89 billion euros since June 27.
Greece’s creditors estimate Athens needs 12 billion euros to get through mid-August — including 4.2 billion euros it must pay the ECB on Monday to keep its crippled banks alive.
“The ECB has become a key player in the Greek saga due to the country’s banks dependency on emergency liquidity assistance. Greece is a very sensitive topic, especially for the ECB which is meant to be independent of political influence,” said Craig Erlam, senior market analyst with the Oanda trading group.
US stocks powered higher in opening trade Thursday underpinned by solid earnings in the banking and technology sectors.
Five minutes into trade, the Dow Jones Industrial Average rose 0.37 percent to 18,116.78 points
The broad-based S&P 500 gained 0.58 percent to 2,119.58 points, while the tech-rich Nasdaq Composite increased 0.67 percent to 5,133.28.
Asian equities also crept up Thursday on investor optimism over Greece.
Tokyo gained 0.67 percent, Seoul added 0.72 percent and Sydney gained 0.59 percent.
Shanghai ended 0.46 percent higher and Hong Kong closed up 0.43 percent, having both opened sharply lower at the start of the session.
Volatility returned to Shanghai and Hong Kong as better-than-expected Chinese economic growth data reduced the chances of fresh economy-boosting measures from Beijing, while there were fears a recent rout in mainland markets could resume.
