Europe Stocks to Open Higher on Greece Hopes
European stocks were expected to open sharply higher on Tuesday after edging up by Monday’s close on fresh hopes that private bondholders could share the burden of Greek debt.
The FTSE is expected to open 30 points higher to 5752, Germany’s DAX is predicted to be up by 45 points to 7153 and the CAC 40 in France is called 24 points higher at 3820.
London’s FTSE closed up 24.62 points on Monday to 5722.34, the CAC 40 was also up 11.75 points to 3796.55, but Germany’s DAX ended the day 13.48 points lower at 7107.90.
In the US stocks closed higher on Monday with the Dow and S&P breaking a three-day losing streak, ahead of crucial votes in the Greek parliament on Wednesday and Thursday and after banking regulators announced capital rules that were less stringent than expected.
In Asia on Tuesday shares also gained amid renewed optimism over Greece, though some caution remains ahead of votes on austerity measures later this week.
Investor confidence was also boosted by news that French banks, among the most exposed to Greece, have agreed a plan to roll over holdings of maturing Greek debt.
The euro briefly rose to an intraday high near $1.4330 in Asian trading, but stalled below chart resistance ahead of further news from Greece.
Against the dollar the single currency was trading up 0.14 percent at $1.4305 before falling back slightly, but the single currency added to gains made on Monday when it enjoyed a short squeeze from a low of $1.4102.
In France the Socialist party will begin its primary race to choose a candidate to challenge President Nicholas Sarkozy at next year’s presidential election.
Frontrunners are expected to be Francoise Hollande, Martine Aubry and Dominique Strauss Kahn, previously managing director at the IMF. Strauss Kahn resigned from that post in May and is currently fighting allegations of sexual assault against a hotel worker in New York City.
German Chancellor Angela Merkel and Chinese Premier Wen Jiabao will hold a press conference in Berlin at 11:30 London time.
In Greece a general strike will get underway on Tuesday as parliament is expected to debate budget cutsneeded to secure a fresh EU-IMF bailout. Deputies are due to vote on the measures on Wednesday and Thursday.
In London, Bank of England governor Mervyn King along with members of the Monetary Policy Committee will give evidence before the Treasury Select Committee from 10:00 on the Bank’s latest inflation report.
Fund Forum International will take place in Monaco on Tuesday where it is expected to be the largest gathering of fund managers in the world.
Economic data out on Tuesday includes first quarter GDP figures, business investment and balance of payments data from the UK at 9:30.
In Germany, July’s consumer climate survey will be released at 7:10 London time.