Europe midday: Shares push higher after Greek parliamentary vote; ECB eyed
European shares pushed higher on Thursday as investors welcomed news that Greek lawmakers have approved the austerity measures needed for Athens to enter formal negotiations over its third bailout.
By midday, the benchmark Stoxx Europe 600 index had risen 1.2%, France’s CAC 40 had gained 1.4% and Germany’s DAX was 1.5% firmer.
Spain’s IBEX 35 and Italy’s FTSE Mib were both up 1.2%.
It’s not a done deal, however, as MPs in euro states now need to vote on the plan, with Germany’s Bundestag due to vote on Friday. The French national assembly has already voted in favour.
In the meantime, the European Commission formally proposed on Wednesday to provide a short-term €7bn bridge gap for Greece through the European Financial Stability Mechanism.
In currency markets, the euro slipped 0.5% against the greenback to $1.0900.
Societe Generale said: “With the debate about debt restructuring well and truly opened, with the Greek government in chaos and with implementation of the terms of the bailout far harder than agreeing to them in Parliament, the uncertainty which can weaken the euro won’t go away any time soon. Secondly, all of this uncertainty will require the ECB to maintain super-easy policies for even longer than was the case already.”
In corporate news, Alfa Laval surged after it posted a better-than-expected rise in second-quarter earnings.
Swatch Group was also firmly in the black after sounding an upbeat note on its full-year outlook, although it posted a near-20% fall in first-half net profit.
Shares in French supermarket retailer Carrefour rose after it said second-quarter sales were given by a boost by strong international growth and a good performance in its home market.
In London, Sports Direct fell into the red despite posting a 31% rise in pre-tax profit, as investors were disappointed that the company has decided to cuts its bonus scheme earnings target for 2016 after failing to make the acquisitions necessary to lift sales.
Anglo American nudged a touch lower after saying its expects writedowns of up to $4bn in the first half of this year relating to its Minas-Rio iron ore operations in Brazil and certain Australian coal assets.
Meanwhile, BT was in focus after UK regulator Ofcom cited a break-up of the company as one of a range of possible measures to improve competitiveness in the digital communications market.
In terms of overall sectors, the Stoxx Europe 600 autos index was the standout gainer, up 2.8% after data showed that European car sales growth rose to its fastest pace in over five years in June.
Data released earlier showed that consumer prices in the Eurozone drifted lower in June compared with a year ago.
Still to come, the European Central bank rate announcement is due at 1245 BST and investors will be watching closely for what the bank has to say about its support for Greek banks, particularly following media reports earlier Thursday suggesting that it will keep Emergency Liquidity Assistance unchanged.
In the US, initial jobless claims at 1330 BST and the Philadelphia Fed survey at 1500 BST are among the highlights.