By Carla Mozee, MarketWatch , Tommy Stubbington
Investors betting on last-minute Greek deal
European stocks steadied at seven-year highs Friday, with
investors focused on the impasse between Greece and its creditors
over a new financing deal for the country.
The Stoxx Europe 600 was off less than 1 point at 380.84, having
hit its highest close since late 2007 on Thursday. The gains came
despite the latest twist in the Greek saga, as Germany on Thursday
rejected a proposal from Athens to extend its loan agreement with
international lenders. Eurozone finance ministers meet on Friday to
try to thrash out a deal to avert a potential Greek exit from the
eurozone.
The negotiations have caused a few brief wobbles in markets, but
by and large, investors have bet a last-minute deal can be
reached.
"The market bias appears to be for a constructive outcome.
However, unless there is an agreement by the end of this week on
Greece, the risk of capital control and exit talks is likely to
increase significantly," said analysts at Barclays.
Greece's Athex Composite rose 0.8% to 863.14, topped by a 4%
rise in shares of Alpha Bank AE .
See: This is the eurozone risk investors are ignoring
(http://www.marketwatch.com/story/this-is-the-eurozone-risk-investors-are-ignoring-2015-02-19)
The euro (EURUSD) weakened 0.1% against the dollar to $1.1350,
but currency markets have also mostly shrugged off Greek
concerns.
"I reckon the euro gets through $1.15 if there is a deal,
collapses if there is a total breakdown, and messes around
mindlessly if there is a fudge that goes on into next week. [And
there has] got to be a strong chance of that," said Kit Juckes,
global macro strategist at Société Générale.
The benign tone in markets was further encouraged by some
better-than-expected manufacturing and services data from France,
with the composite data for both sectors showing an unexpected
expansion of business activity in February. Still, France's CAC 40
index fell 0.5% to 4,812.75. Shares under pressure included
milk-products maker Danone SA , which announced a disappointing
profit outlook, and Gemalto NV , a maker of smart cards, which is
investigating claims U.S. and U.K. spy agencies massively hacked
its software.
Overall, business activity in the eurozone increased in
February, with data firm Markit saying its composite purchasing
managers index rose to 53.5 in February
(http://www.marketwatch.com/story/european-economy-shows-signs-of-revival-2015-02-20)
from 52.6 a month earlier, the highest reading for seven months. A
reading above 50 indicates expansion in business activity.
Germany's DAX 30 index shed 0.5% to 10,952.70, pulling back
after closing on Thursday at a record high of 11,001.94.
Elsewhere, the U.K.'s FTSE 100 swung up 0.4% to 6,914.37, led by
a 3% rise in Standard Life PLC following full-year results
(http://www.marketwatch.com/story/standard-life-assets-under-management-rises-38-2015-02-20)
from the investment manager. The index has hovered just short of
its all-time high in recent days.
The pound (GBPUSD), meanwhile, slipped against the dollar after
U.K. retail sales in January fell 0.3%, lower than a widely
expected decline of 0.2%. Sterling bought $1.5379, compared with
$1.5416 late Thursday.
In commodity markets, Brent crude steadied after the previous
day's decline, rising 0.2% to $60.33 a barrel. Gold (GCJ5) slipped
0.3% to $1,203.60 an ounce.
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