(MENAFN- Gulf Times) Most of Europe's main stock markets climbed yesterday after eurozone ministers tentatively agreed to extend Greece's bailout by four months, but London slid on disappointing results from HSBC bank.
Frankfurt's DAX 30 index finished the day up 0.73% to 11,130.92 points, and in Paris the CAC 40 climbed 0.65% to 4,862.30 points, while trading in Athens was shut for a holiday. Milan added 0.56% and Madrid jumped 1.02%.
On the downside, London's benchmark FTSE 100 edged down 0.04% to 6,912.16 points after HSBC posted a 15% slump in annual net profits.
In foreign exchange activity, the euro slipped to $1.1345 from $1.1381 late in New York on Friday.
"European equity markets rebounded and posted fresh gains in today's session, starting the week in positive territory as concerns eased slightly following a tentative agreement between Greece and other eurozone members on Friday," said research analyst Myrto Sokou at Sucden Research.
Greece's new anti-austerity government shifted course on Friday, and agreed to a eurozone offer to extend the current bailout instead of seeking a temporary finance deal while it comes up with a new economic programme.
Eurozone finance ministers demanded new reform proposals by midnight Monday, which had Athens scrambling to submit a preliminary list to secure the four-month extension to its lifeline bailout. "However, investors will be looking for further clarification in the upcoming days as a final proposal is scheduled for tomorrow regarding the specific terms and conditions," added Sokou. If the measures fail to win the approval of Greece's international creditors, the country's safety net will collapse on Saturday, leaving the government at risk of running out of cash, a run on banks and even a eurozone exit.
"The loan-extension deal announced on Friday is a small step in the right direction," said analysts at US bank Morgan Stanley in a research note. "Yet there's little agreement on the reform measures that the Greek government will have to comply with. "The chance of policy mistakes, political volatility and implementation risks remains quite high, and may rise."
The biggest faller on the London stock market was Asia-focused banking giant HSBC, which revealed that 2014 earnings plunged in a "challenging year" that was blighted by fines and compensation awards for selling consumers insurance products they did not need. The bank, which is currently mired in a scandal over alleged tax-dodging at its Swiss private banking division, said profits after taxation sank 15% to $13.7bn in 2014. That compared with $18.7bn in 2013 when its performance was also boosted by disposals. Pre-tax profits meanwhile tumbled 17% to $18.7bn. The news caused HSBC shares to dive 4.63% to 577.2 pence.
Also in the bank sector, Britain sold a 1.0-percent stake in state-rescued Lloyds Banking Group for £500mn ($769mn, ‚¬677mn), trimming the government's stake to just under 24%. LBG's share price gained 1.33% to 79.02 pence. The latest shares were sold above the average price that the previous government had paid for them, which was 73.6 pence. Fed shadows Wall Street - Meanwhile in the US, Federal Reserve Chair Janet Yellen's expected update of US monetary policy in Congress this week cast a shadow on trading.
The Dow Jones Industrial Average shed 0.22% to stand at 18,101.11 points in midday trade and the broad-based S&P 500 slid 0.12% to 2,107.87. Both the Dow and S&P 500 finished at record highs Friday.
Meanwhile the tech-rich Nasdaq composite Index edged up 0.01% to 4,956.22 points. Page 18
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