Global markets rally over hopes of last-minute Greece deal

First day of trading week starts with optimism that Greece and its international lenders will strike a deal saving Athens from defaulting and exiting eurozone

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Global stocks, the euro and peripheral eurozone bonds all rose on Monday, lifted by a wave of optimism that Greece and its international creditors will strike a last-minute deal.

Greek Prime Minister Alexis Tsipras will meet the heads of the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) on Monday ahead of a summit of eurozone 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" an agreement will be reached.

Financial markets appeared willing to give the parties 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.

In early European trading Germany's DAX was up almost 3 percent at 11,360 points, France's CAC 40 up 2.5 percent at 4,945 points and Britain's FTSE 100 up 1.4 percent at 6,802 points.

Greek stocks opened 6.5 percent higher, with Greek banks soaring 15 percent.

The broader EuroFirst300 index of the leading 300 European shares was up 2 percent at 1,560 points, with prices also boosted by merger and acquisition activity.

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.

Oil prices rose to $64 a barrel on Monday, joining stronger financial markets on speculation that European Union leaders could avert a Greek bankruptcy. Brent crude for August delivery was up 53 cents at $63.55 a barrel, after falling nearly 2 percent on Friday over worries about a potential Greek debt default, while US crude was 40 cents higher at $60.01 a barrel.