Global markets rally on Greek optimism

LONDON | By Jamie McGeever

Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt, Germany June 22, 2015.

Reuters/Stringer

Global stocks, the euro and peripheral euro zone bonds all rose on Monday, lifted by a wave of optimism that Greece and its international creditors will strike a last-minute deal that will see Athens avert default. Greek Prime Minister Alexis Tsipras will meet the heads of the European Commission, European Central Bank and International Monetary Fund on Monday ahead of a summit of euro zone leaders later in the day aimed at reaching a deal over debt talks.
The chief-of-staff to European Commission President Jean-Claude Juncker called the latest proposals from Greece a "good basis for progress", while EU Economic Commissioner Pierre Moscovici said he was "convinced" agreement will be reached.
Financial markets appeared willing to give the
protagonists in the saga the benefit of the doubt. German stocks jumped 2.5 percent and the 10-year yield on Spanish and Italian bonds fell as much as 12 basis points.
"The most likely outcome, with a 75 percent probability, is a deal," Credit Suisse analysts said in a note on Monday.
"An unfortunate but predictable feature of European crisis decision-making is that such deals are only ever made at the last minute, 'at the edge of the abyss'," they said.
In early European trading Germany's DAX .GDAXI was up almost 3 percent at 11,360 points, France's CAC 40 .FCHI up 2.5 percent at 4,945 points and Britain's FTSE 100 .FTSE up 1.4 percent at 6,802 points.
Greek stocks opened 6.5 percent higher .ATG, with Greek banks soaring 15 percent .FTATBNK.
The broader EuroFirst300 index of the leading 300 European shares was up 2 percent at 1,560 points .FTEU3, with prices also boosted by merger and acquisition activity.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.9 percent, its biggest rise in more than two months, while Japan's Nikkei stock index .N225 added 1.3 percent.