Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Greek vote fails to derail Europe's ECB-driven share rally

01/26/2015 | 10:50am EDT
A man walks past the London Stock Exchange in the City of London

LONDON (Reuters) - Greek stocks fell in volatile trade on Monday after anti-austerity party Syriza swept to victory in Sunday's election, while other European equities kept rising on the promise of European Central Bank bond-buying.

Athens's ATG index fell 3.2 percent, led lower by banks such as Piraeus Bank, down 17.6 percent, and Alpha Bank, down 11.6 percent, as investors fretted about a possible stand-off with Greece's EU/IMF lenders.

Greek shares briefly turned positive in volatile trade before turning lower again, after leftwing leader Alexis Tsipras struck a deal to form a government with a right-wing party that also opposes the terms of Greece's 240 million euro (180 million pounds) bailout.

Syriza has promised an end to years of painful austerity and said it wants Greece's debts restructured, which could put Athens on a collision course with euro zone partners and threaten its continued membership of the single currency.

"There's a lot of uncertainty in the markets at the moment with regard to Greece. While it has formed a coalition, we don't really know how effective their agenda of debt renegotiation will be," Coutts global equity strategist James Butterfill said.

Butterfill said that while the quick formation of a new government was welcome, there was still uncertainty over Greece's continued membership of the euro, even though Syriza has said it intends to work with creditors on a new deal.

"Wealthy individuals may take money out of Greek banks and move them into other euro zone banks, where they feel protected against the Greek exit worry," he added.

Across Europe, euro zone shares were supported by the ECB's new stimulus measures to revive the euro zone's economy.

The pan-European FTSEurofirst 300 index was up 0.2 percent at 1,482.00 points at 1521 GMT, close to seven-year highs, with German and French benchmarks in positive territory.

Southern European markets recovered from early falls, with Italy's MIB index, Portugal's PSI 20 and Spain's IBEX all 0.6 percent to 1.1 percent higher.

Investors said the move by the ECB to buy government bonds added to the appeal of European equities, with markets much more insulated from turmoil in Greece than they were in 2012, at the peak of the sovereign debt crisis.

"The aftermath of the Greek elections is likely to keep volatility elevated, but in our view the factor which will end up as the dominant one is the turn in euro zone’s activity momentum," analysts at JP Morgan wrote in a note.

"The turn in euro zone’s macro momentum is happening right at the time when ECB is starting to act more aggressively ... we would recommend using any dips as opportunities to buy."

International Consolidated Airlines Group (IAG) rose 4.8 percent after Aer Lingus said it was considering an improved 1.36 billion euro takeover proposal from the owner of British Airways.

It is the third attempt by IAG to buy its Irish rival, which traders said makes strategic sense for the airline. Aer Lingus rose 1.3 percent.

(Editing by Catherine Evans)

By Alistair Smout


© Reuters 2015
Stocks mentioned in the article
ChangeLast1st jan.
IBEX 35 -1.26% 8675.7 Delayed Quote.7.46%
INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. -7.45% 168.1 Delayed Quote.5.19%
PSI 20 INDEX -1.81% 5026.9 Real-time Quote.2.62%
Latest news "Economy & Forex"
04:58pU.S. CDC Reports Total Deaths Of 610,873 Due To Coronavirus As Of July 31
RE
04:58pU.s. cdc reports total novel coronavirus cases of 34,926,462 as of july 31 vs 34,818,278 in previous report on july 30
RE
04:57pU.s. cdc reports total deaths of 610,873 due to coronavirus as of july 31 vs 609,853 in previous report on july 30
RE
04:55pU.s. cdc says 164,446,964 individuals have been fully vaccinated against covid-19 as of july 31 vs 164,184,080 individuals as of july 30
RE
04:54pPrivate equity firm CD&R readies Morrisons counter-bid - report
RE
04:54pU.s. cdc says 190,982,149 individuals have received at least one dose of covid-19 vaccine as of july 31 vs 190,509,183 individuals as of july 30
RE
04:53pU.s. cdc says administered 345,640,466 doses of covid-19 vaccine as of july 31 vs 344,071,595 doses administered as of july 30
RE
04:52pU.s. cdc says delivered 400,675,525 doses of covid-19 vaccine as of july 31 vs 399,090,105 doses delivered as of july 30
RE
04:42pBSTDB BLACK SEA TRADE AND DEVELOPMENT BANK : Invests EUR 35 million in Upgrading of Bulgarian Energy Holding
PU
04:29pU.S. COVID-19 residential eviction ban set to expire at midnight
RE
Latest news "Economy & Forex"