By Josie Cox
European stocks rose cautiously Tuesday, with some robust
corporate earnings offsetting jitters surrounding the future of
Greece's economy.
The Stoxx Europe 600 index ended the session just over 0.5%
higher, building on Monday's gains, while Germany's DAX 30 added
0.4%, France's CAC 0.1% and London's FTSE 100 just under 0.2%.
French advertising company Publicis Groupe SA was one of the
strongest performing stocks across Europe with its share price
gaining more than 5% at one point during the session, buoyed by the
company reporting stronger than expected first-quarter revenue and
guiding for more satisfactory growth in 2015.
Other upbeat earnings came from U.K.-listed broadcaster Sky PLC,
Swedish telecom operator Tele2 AB, Dutch paint and chemicals maker
Akzo Nobel NV and Europe's biggest biotech company, Switzerland's
Actelion Ltd.
In currency markets, the euro recovered from some weakness
earlier in the session to end the day marginally higher against the
dollar at $1.075. Nonetheless, strategists voiced caution on the
currency, saying that if the situation surrounding Greece fails,
the euro could come under fresh pressure.
On Monday, Greece's government issued a decree requiring public
bodies such as state-owned companies and public pension funds to
transfer their cash reserves to the central bank as the country's
cash reserves continue to dry up.
Eurozone finance ministers are due to meet in Riga, Latvia, on
Friday. However, a deal on fresh aid is unlikely to be agreed
before the Eurogroup meeting on May 11, a day before Greece must
pay EUR780 million ($838 million) due to the International Monetary
Fund.
Since the start of the year, the euro has fallen close to 12%
against the greenback, though this move has largely been driven by
dollar strength as a result of expectations that the U.S. Federal
Reserve is paving the way for an interest-rate increase, while the
European Central Bank continues to move in the opposite direction.
Higher interest rates broadly make a country's currency more
attractive.
Much of the move this week, however, is being driven
predominantly by Greece, strategists have said.
In debt markets Tuesday, yields on German government bonds,
commonly considered one of the safest assets during times of
volatility, continued to hover around record lows.
The yield on the country's 10-year bond, or Bund, was under
0.074% at midday--a shade off its all-time low but fast approaching
negative territory-- before creeping higher later in the session.
Bond yields fall as prices rise.
Gold, another asset commonly sought during times of stress rose
0.4% on the day to $1,198.10 per troy ounce, while Brent crude fell
around 1.2% to $62.68 a barrel.
Write to Josie Cox at josie.cox@wsj.com
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