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Updated: Wednesday, February 8, 2012 News Source: AFP
European stock markets rose on Wednesday on growing prospects that Greece would reach a bailout deal with creditors on its massive debt and avoid a potentially disastrous default, traders said.
In late morning trading, London's benchmark FTSE 100 index advanced 0.22 percent to 5,902.69 points, Frankfurt's DAX 30 won 0.58 percent to 6,793.46 points and in Paris the CAC 40 added 0.40 percent to 3,425.54.
"Some optimism that a deal will be struck today in Greece is tentatively propping up the markets," said analyst Mike McCudden at online brokerage Interactive Investor.
The euro firmed to $1.3283 from $1.3261 late in New York on Tuesday, boosted by reports that a final Greek debt rescheduling deal had been drafted.
"A fresh wave of optimism has been injected into the euro, with the single currency outperforming in recent trade on the back of legitimate expectations that a Greece deal is finally near," said Joel Kruger, an analyst at traders Daily FX.
A finalised plan on new Greek aid that was hammered out with the European Union and IMF has been handed to partners in the governing coalition, a conservative party source said on Wednesday.
Heads of the socialist, conservative and far-right parties are expected to approve the 50-page text at a meeting scheduled for about midday, the New Democratic (ND) party said.
It would clear the way for a second rescue worth 130 billion euros ($173 billion) from the EU, European Central Bank (ECB) and International Monetary Fund which is vital if Greece is to avert a debt default in March.
"Despite numerous delays and missed deadlines, investors have convinced themselves that Greece is about to finalise details of a debt swap with bondholders, and its policymakers are close to accepting further austerity measures," said analyst David Morrison at trading group GFT.
"Agreement on the latter will allow the EU/IMF/ECB troika to finalise the second Greek bailout package," he added.
In company news, Mobile phone maker Nokia said it would cut 4,000 jobs at its smartphone manufacturing facilities in Finland, Hungary and Mexico by the end of 2012.
"The expected headcount impact by country is 2,300 in Komarom (Hungary), 700 in Reynosa (Mexico) and 1,000 in Salo (Finland)," company spokesman James Etheridge told AFP.
The job cuts follow a review of smartphone operations announced in September 2011, when the company warned jobs may be cut at the plants in question.
Elsewhere, Asian equities closed higher on Wednesday, tracking overnight gains on Wall Street amid growing hopes of a Greek debt agreement.
Hong Kong soared 1.54 percent, Sydney was 0.40 percent higher, Tokyo gained 1.10 percent and Seoul jumped 1.12 percent. Shanghai meanwhile leapt 2.43 percent.