- European stocks positive; Greece remains in focus
- Euro supported by Trichet's comments
- Euro-zone inflation knowledge underpins ECB rate hike expectations
- supply says German arrange for personal sector involvement to be presented later
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--European stocks were within the black Thursday as investors continued to take advantage of the positive momentum from the previous session once the Greek government successfully voted in favor of stringent austerity measures. however traders cautioned this might be very little quite a modest relief rally, with more pain for Greece along the road probably to stay investors on their toes.
By a thousand GMT, the Stoxx Europe 600 index was up zero.2% at 270.23. London's FTSE one hundred was up zero.7% at 5893.34, Frankfurt's DAX was up zero.1% at 7300.67 and Paris's CAC-40 was zero.2% higher at 3933.65.
At an equivalent time, U.S. stock-index futures indicated a rather higher open on Wall Street, with the Dow Jones Industrial Average futures for September delivery and normal & Poor's five hundred contract for an equivalent month up zero.2% at 12,238.00 and 1306.30, respectively.
Despite continuing protests--some violent--on the streets of Athens, investors were happy that a euro-zone financial ruin had been averted, for now.
"Although one wouldn't suppose it from the photographs from Athens, European policymakers have expressed their approval that Armageddon has been averted following the vote of approval within the Greek parliament," said Dermot O'Leary, economist at Goodbody Stockbrokers.
The next stage within the Greek story comes later Thursday, when the Greek parliament is owing to vote on the implementation of the austerity arrange. however the implementation vote, that is widely is anticipated to travel through, is by no means that the ultimate hurdle for Greece, with several market participants still convinced it'll got to default on its debt sooner or later.
"With the [Greek] economy probably to still contract as a results of the fiscal measures, the implementation risk is elevated. Similarly, we have a tendency to believe the chance is high that the privatization targets are undershot," said BNP Paribas. "Following the relief rally, therefore, market tensions are probably to still bubble beneath the surface and erupt periodically," it added.
Meanwhile, investors digested euro-zone knowledge showing that the inflation rate was unchanged in June from could, at 2.7%, against economists' expectations of two.8%.
This, beside hawkish comments from European Central Bank president Jean-Claude Trichet, cemented the chance that the ecu Central Bank can raise interest rates at next week's meeting.
"During his speech at the ecu Parliament, Trichet clearly stated the the ECB is keen on avoiding second-round effects within the medium term. As such, a rate hike at next week's Governing Council meeting looks to be a done deal," said Newedge. It added that this economic situation would justify a wait-and-see approach beyond the July meeting.
The prospect that Germany could follow in France's footsteps and conform to rollover some Greek government debt was conjointly serving to to underpin sentiment. A supply told Dow Jones Newswires Thursday that a German arrange for private-sector involvement are going to be presented later within the day.
The oil and gas sector rose sharply once U.K. listed gas major BG cluster increased four.4% to 1410.0p once doubling its total reserves and resources estimate for the Santos Basin.
Elsewhere, Lloyds Banking cluster soared eight.2% to 48.00 pence on London's FTSE one hundred once revealing its new strategy, which has a thought to chop fifteen,000 jobs to assist save GBP1.5 billion a year. The aim is to come to profitability in order that the U.K. government will sell its forty first stake within the bank. This helped the Stoxx Europe 600 banks index to push up zero.8% to 183.39.
Earlier Thursday, Asian stock markets ended higher because the passage of the crucial package of austerity measures in Greece boosted sentiment.
Japan's Nikkei Stock Average added zero.2%, Australia's S&P/ASX two hundred gained one.7% and South Korea's Kospi Composite rose zero.3%. Hong Kong's suspend Seng Index climbed one.4% and China's Shanghai Composite advanced one.2%.
In foreign exchange markets, the euro was stronger against the greenback, supported by Trichet's hawkish comments. Trichet said "strong vigilance" is warranted and medium-term inflation risks are on the upside. At a thousand GMT, the only currency was at $1.4473 against the greenback, from $1.4428 late Wednesday in ny, and therefore the greenback was at Y80.42, from Y80.80.
Elsewhere, spot gold was up $1.90 at $1,510.40 per troy ounce. August Nymex crude oil futures were down sixteen cents at $94.61 per barrel. September bund futures were down zero.10 at 125.80.
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