Tokyo (AFP) – European stocks jumped Wednesday, mirroring gains in Asia, as investors welcomed Greece’s debt relief deal, bright German and US economic data, easing Brexit concerns and firmer oil prices.
The region’s markets had also climbed the previous day as opinion polls suggested Britain would vote to remain in the European Union in a crucial referendum next month.
Sentiment was boosted further Wednesday after eurozone ministers clinched vital agreement with Greece to unlock more bailout cash and start tackling the country’s debt mountain.
The deal releases 10.3 billion euros ($12 billion) in bailout funds that Greece urgently needs to repay big loans to the European Central Bank (ECB) and International Monetary Fund (IMF) in July, having already fallen behind in paying for everyday government duties and wages.
“With a much needed 10.3 billion euros in Greek bailout funds approved in the early hours of the morning, the European markets have gotten off to a perky start,” said analyst Connor Campbell, at trading firm Spreadex.
“The eurozone finance ministers were at it all night… to hash out a deal that satisfies both those opposed to major debt relief — Germany –and those who are adamant that Greece cannot survive without it — the IMF.”
Around 1115 GMT, the London stock market was up 0.6 percent and Paris added 0.9 percent in value compared with Tuesday’s close.
Frankfurt rallied 1.3 percent after a key survey showed that German businesses are feeling increasingly positive over the economic outlook in the eurozone powerhouse.
The Ifo institute’s business climate index rose by a full point to 107.7 points in May, comfortably outpacing analysts’ expectations, Ifo said in a statement.
The better-than-expected data reinforce the resilient picture of the German economy, which more than doubled its growth pace to 0.7 percent in the first three months.
The Ifo confirms “the German economy is starting to benefit from an uptick in economy activity of some of their major trading partners like China and the United States”, said analyst Markus Huber, at City of London Markets.
– Energy focus –
The energy sector forged higher on rising oil prices, which boost profits and revenues.
London-listed Royal Dutch Shell was also lifted after it announced another 2,200 job cuts due to low oil prices and following its takeover of smaller rival BG Group.
Shell’s “A” share price soared 1.0 percent to 1,671.50 pence in London, while rival BP saw its shares gain 1.3 percent to 362.3 pence.
French peer Total won 1.1 percent to 43.60 euros in Paris.
Back in London, Marks & Spencer plunged 7.9 percent to 409.70 pence after the British retailer warned that a new turnaround plan would have a short-term hit on profits.
M&S also revealed that net earnings slid 16 percent to £406.9 million ($592 million, 529 million euros) in the group’s financial year to April 2, hit partly by poor clothing sales.
Elsewhere, Asian equities gained ground on Wednesday, as investors also adjusted to the prospect of a US rate rise in the near future.
New York stocks charged higher overnight, with technology and financial shares benefitting especially from greater confidence in the US economic outlook.
The Fed has repeatedly stated its intention to continue raising interest rates this year after December’s first hike in nine years.
But until recently investors had discounted the possibility of an imminent increase, given the market panic at the beginning of 2016 on concerns of soft global growth.
– Key figures at 1115 GMT –
London – FTSE 100: UP 0.6 percent at 6,255.50 points
Frankfurt – DAX 30: UP 1.3 percent at 10,187
Paris – CAC 40: UP 0.9 percent at 4,473.10
EURO STOXX 50: UP 1.5 percent at 3,053.80
Tokyo: Nikkei 225: UP 1.6 percent at 16,757.35 (close)
Shanghai – Composite: DOWN 0.23 percent at 2,815.09 (close)
Hong Kong – Hang Seng: UP 2.7 percent at 20,368.05 (close)
New York – Dow: UP 1.2 percent at 17,706.05 (close)
Euro/dollar: UP at $1.1152 from $1.1141 on Tuesday
Dollar/yen: UP at 110.13 yen from 109.99 yen
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