ECONOMY

Greek stocks end the day up 11 percent

The Greek stock market soared on Tuesday on hopes that a deal can be reached between the new government in Athens and Greeces international creditors.

The general Athex index closed up 11.27 percent at 841 points, after Finance Minister Yanis Varoufakis set out the government’s plans to renegotiate its mountain of debt.

The increase marks a correction of the market to the level seen before the January 25 elections, which swept the anti-austerity Syriza party into government.

The banking index finished the day up 17.96 percent.

In a further sign of growing investor confidence, the rate of return on 10-year Greek bonds fell to 9.7 percent before rising slightly. It had reached 11 percent last week.

The victory of Syriza on a promise of ending austerity and halving Greeces debt caused turmoil in European financial markets.

Stocks slumped 9.2 percent last Wednesday to their lowest level since June 2012 and shares in Greeces four main banks lost more than a quarter of their value.

But Prime Minister Alexis Tsipras and Varoufakis have this week been touring European capitals to reassure their creditors and allies that a default — and possible Greek exit from the single currency area — is not on the cards.

They have given more details of their proposed renegotiation, including plans not to write off Greek debt but to reformat the loans in what Varoufakis described as “smart debt engineering.”

“After a week of trading insults and threats it looks like the eurozone paymasters and the new Greek government are finally ready to compromise,” said Kathleen Brooks, research director at trading site Forex.com.

“The better tone to the conversation is reflected in the performance of the Athens stock exchange.” [AFP]