Global stocks, the euro and peripheral euro zone bonds all rose today, lifted by a wave of optimism that Greece and its international creditors will strike a last-minute deal that will see Athens avert default.
US stocks ended higher, with the Nasdaq closing at a record as hopes grew that a deal would be reached to prevent Greece from defaulting on loans.
Equities have been largely driven by the situation in Greece of late, with investors concerned that if the country defaults on its loans, it may have to leave the euro or the European Union, potentially shaking the region’s economic foundations.
Athens presented new reform proposals which were cautiously welcomed by euro zone finance on Monday, though the Eurogroup said the proposals required detailed study and that it would take several days to determine whether they can lead to an agreement. Greece needs fresh funds to avoid defaulting on a $1.8 billion debt repayment to the International Monetary Fund on June 30.
The Dow Jones industrial average rose 104.53 points, or 0.58 percent, to 18,120.48, the S&P 500 gained 13 points, or 0.62 percent, to 2,122.99 and the Nasdaq Composite added 36.97 points, or 0.72 percent, to 5,153.97.
With the day’s gains, the Nasdaq ended at a record while the S&P closed 0.3 percent away from its own record close. Currently, the S&P trades at 17.3 times earnings, according to Thomson Reuters data, above its long-term average.
European shares surged to their highest level in more than a week, with the Greek stock exchange rebounding heavily.
The telecoms sector outperformed the broader market after a takeover bid for France’s Bouygues Telecom reignited hopes for more corporate deals.
Greek stocks climbed 9 percent, with local banking shares jumping nearly 21 percent. Investors have been nervous that deposit outflows may prompt capital controls.
The pan-European FTSEurofirst 300 index closed 2.4 percent higher, while the euro zone’s Euro STOXX 50 gained 4.1 percent, its biggest one-day percentage rise since August 2012. The VSTOXX measure of European stock-market volatility slumped to its lowest level in 10 days.
Share indexes in Britain, France, Germany , Italy and Spain rose 1.7 to 3.9 percent.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9 percent, its biggest rise in more than two months, while Japan’s Nikkei stock index added 1.3 percent.
Chinese mainland markets were closed today for a holiday, after posting their biggest weekly loss since 2008 last week.
Source: Buenos Aires Herald