Hopes of Greek debt resolution boosts indices

Eurostoxx 50: 2,750.49 (+26.56) Frankfurt DAX: 7,170.43 (+62.53) Paris CAC: 3,851.89 (+55.34):EUROPEAN STOCKS gained yesterday, as investors speculated that Greek politicians would heed prime minister George Papandreou's call to approve a package of austerity measures.

“Without Europe’s debt crisis, the environment is positive for equities,” said Thilo Mueller of MB Fund Advisory GmbH in Limburg, Germany.

Mr Papandreou faces his second survival test in a week today when politicians vote on the package of budget cuts and asset sales that is needed before Greece can get the fifth loan payment from last year’s €110 billion rescue. Failure to pass Mr Papandreou’s €78 billion plan may lead to the euro area’s first sovereign debt default.

Greece’s ASE Index rose 2.7 per cent yesterday as Alpha Bank surged 4.3 per cent to €3.42 and National Bank of Greece, the country’s largest lender, soared 5.4 per cent to €4.90.

EFG Eurobank Ergasias rallied 5.8 per cent to €3.26. European Central Bank executive board member Juergen Stark said he did not expect the international community to finance Greece further after July if the country failed to implement its austerity plan, Die Welt reported, citing an interview.

Banking shares were the second-best performers in the Stoxx 600 yesterday.

UBS and Credit Suisse rose 2.4 per cent to 14.77 Swiss francs and 0.8 per cent to 31.88 francs, respectively.

Prudential increased 2.6 per cent to 705.5p after the insurer was raised to “buy” from “neutral” at Goldman Sachs.

Legal and General rose 1.3 per cent to 111p and St James’s Place advanced 0.6 per cent to 321p.

Adidas, the world’s second-largest sporting goods maker, jumped 3.9 per cent to €53.78 after Nike, the world’s largest sporting goods company, posted fourth-quarter per share earnings of $1.24.

Puma, the sporting-goods brand known for its leaping cat logo, increased 2.6 per cent to €210.35.

Cable and Wireless Worldwide plunged 14 per cent to 45p.

Siemens declined 1.9 per cent to €91 as Europe’s largest engineering company said it must increase efforts to foster growth in the second half because the stimulus from the global economic recovery was fading. – (Bloomberg)