European Stocks Extend 2007 High on Greek Agreement; HSBC Falls

by Inyoung Hwang

(Bloomberg) -- European stocks climbed to a seven-year high after Greek creditors agreed to extend the nation’s bailout funds.
The Stoxx Europe 600 Index rose 0.6 percent to 384.45 at 8:58 a.m. in London. The gauge advanced for a third week, the longest stretch since the start of December, on optimism Greece and its creditors would come up with an agreement.
The nation’s bailout terms were extended by four months, and Greece needs to complete by the end of a day a list of policies in return for the continued funding. Finance chiefs will then decide whether the proposals go far enough or trigger another round of emergency negotiations this week.

Greece’s ASE Index slipped 4.5 percent last week. The Greek market is closed on Monday for a holiday.
The wrangling in Greece has helped push Europe stock volatility higher. The VStoxx Index, which tracks expectations for equity swings, had a daily average of 25.4 this year through Feb. 20, or 39 percent greater than in 2014.
The Stoxx 600 advanced 12 percent this year through the end of last week as the European Central Bank announced quantitative easing. That’s sent the relative
strength index, a measure of market momentum, above 70 and to its highest level since May 2013, a sign that the rally may have been too quick to maintain. The Stoxx 600 fell to a six-month low in June of that year.
The volume of Stoxx 600 shares changing hands was 37 percent greater than the 30-day average, data compiled by Bloomberg show.

FTSE 100 Record

Health-care companies led the Stoxx 600 gains today, while commodity producers declined. The U.K.’s FTSE 100 Index surpassed a record close in intraday trading before slipping 0.1 percent, weighed down by losses in HSBC Holdings Plc.
Among stocks moving on corporate news, PostNL NV climbed 8.9 percent after the Dutch company reported 2014 revenue was 4.25 billion euros ($4.83 billion), exceeding the 4.02 billion euros that was estimated. Lloyds Banking Group Plc gained 1.7 percent after the U.K. government sold a further 500 million pounds ($769 million) of shares, reducing its stake in the country’s largest mortgage lender.
HSBC fell 5 percent after Europe’s largest bank said full-year profit fell more than analysts estimated as costs increased and the company made provisions for fines and settlements. Ladbrokes Plc dropped 7 percent after the Sunday Times reported it is closing about 50 betting shops.