Europe Stocks Up as Greece Reaches Deal With Creditors

By Josie Cox 
        European stocks rallied early Monday after eurozone leaders said they 
would give Greece another multibillion-euro bailout provided that the government 
manages to implement a round of punishing austerity measures in the coming days. 



        In early trading, the Stoxx Europe 600 rose 1.2%, building on 
Friday's hefty gains. Germany's DAX rose 1.3%, France's CAC-40 added 1.5% and 
London's FTSE 100 rose 0.6%. The euro hit an intraday high of $1.1197 against 
the dollar before falling 0.4% on the day. 


        "Eurosummit has unanimously reached agreement," said Donald Tusk, who 
presided over the talks with leaders, in a tweet. 


        The tentative rescue deal is likely to require the Greek left-wing 
government's near-total surrender to its creditors' demands. 


        Markets "are taking the glass-half-full view," said Viktor Szabo, 
investment manager at Aberdeen Asset Management, which has around $490.8 billion 
in assets under management. 


        Bonds in Italy, Spain and Portugal-- countries considered most 
vulnerable to shocks from Greece--rallied on the news. 


        The yield on 10-year Italian debt was at 2.09%, 0.05 percentage point 
lower on the day, while the yield on 10-year Spanish debt fell 0.05 percentage 
point to 2.07%. Portuguese 10-year bond yields were 0.10 percentage point lower 
at 2.73%. Yields fall as bond prices rise. 


        German government bonds, considered safer during times of volatility, 
sold off, sending the yield on the 10-year around 0.04 percentage point higher 
to 0.93%. 


        Greek two-year bond yields fell around 5.5 percentage points to 
24.5%, according to Tradeweb, although trading in Greek government bonds remains 
limited. 


        Monday's moves follow weeks of sharp swings in stock, bond and 
currency markets in part fueled by the standoff between Greece and its 
creditors. 


        The Stoxx Europe 600 has closed more than 1% higher or lower on 12 
days since the start of June. Over the same period in 2014, it did so on just 
three days. 


        The yield on Italian 10-year benchmark bonds hit its highest level 
since November 2014 on June 29, the first trading day after of Prime Minister 
Alexis Tsipras shocked European policy makers by announcing the country would 
hold a referendum on whether to accept the terms of Greece's creditors to unlock 
desperately needed financial aid. 


        On Friday Italian 10-year yields fell to a five-week low after new 
Greek proposals for policy overhauls and budget cuts appeared closer to 
creditors' demands. Spanish bonds yields have broadly followed that trajectory. 



        Greece's stock market is set to stay closed again on Monday. It has 
been shut along with the country's banks since June 29. 


        In commodity markets, Brent crude was down 1.6% at $57.80 a barrel. 
Gold fell 0.3% to just below $1,154.80 a troy ounce. 


        --Chiara Albanese contributed to this article. 


        Write to Josie Cox at josie.cox@wsj.com 


        (END) Dow Jones Newswires


        July 13, 2015 04:17 ET (08:17 GMT)

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