Europe Economy

Europe Shares Seen Higher on Greek Vote Hopes

Reuters and

European stocks were expected to open higher after ending up on Tuesday’s close amid optimism that the Greek parliament will approve fresh austerity measures in a vote on Wednesday.

The FTSE is expected to open 30 points higher at 5797 points, Germany’s DAX is predicted to be up by 37 points to 7207 and the CAC 40 in France is called 16 points higher at 3868.

London’s FTSE closed up 44.54 points on Tuesday to 5766.88, the CAC 40 was also up 55.34 points to 3851.89, and Germany’s DAX ended the day 62.53 points higher at 7170.43.

Banking shares rose, with sentiment in the sector also boosted by news that Germany will meet top insurers and banks to discuss a French proposalfor greater private sector involvement in Greek debt rollover.

In the US stocks finished more than one percent higher across the board on Tuesday, extending Monday’s rally and in response to renewed hope over Greece.

In Asia, stocks were up on Wednesday ahead of the vote in the Greek parliament, showing increasing confidence that tough new austerity measures will be approved.

The euro maintained overnight gains early in Asia on Wednesday ahead of the Greek vote and comments made by ECB President Jean Claude Trichet, which markets interpreted as signaling an interest rate hike in July, also helped shore up the single currency.

Against the dollar the euro last traded at $1.4351, having come close to $1.4400 overnight, recovering from the week’s trough of around $1.4100.

Against the Swiss franc the European currency climbed to 1.1959 francs.

Further unrest is likely on the streets of Athens on Wednesdayas the Greek parliament votes on the 28 billion euro package of austerity measures which must be passed by July 3 for Greece to receive a second EU-IMF bailout worth up to 100 billion euros and which is a condition of the next 12 billion euro tranche of aid.

In London, the British Banking Association’s Annual International Banking Conference will get underway, where changes to the banking system are expected to top the agenda.

In Berlin, German Chancellor Angela Merkel and Deutsche Bank CEO Josef Ackermann will attend a conference on ‘Regulation of Financial Markets After the Crisis’, an event which is open to the public.

The European Commission will publish its budget proposals on Wednesday as part of the EU’s Multi-annual Financial Framework.

Economic data out on Wednesday includes first quarter GDP figures for France which will be available at 6:30 London time, followed by German foreign trade data for May, out at 7:00.

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