Greek equities rallied as euro-area finance ministers approved the nation’s package of new economic measures, paving the way for an extension of its bailout plan.
The ASE Index rose 8.5 percent to 927.13 at 4:30 p.m. in Athens, with a gauge of banks rallying as much as 16 percent. The ASE is set to close at its highest level since Dec. 8.
“We get that four-month extension that we were all praying for,” said Ioan Smith, managing director at KCG Europe Ltd. in London. “It’s not really doing anything for the long-term sustainability, and it’s nowhere close to a structural solution. But if it’s something that we can ignore for four months, I guess everyone will continue buying until there’s some sort of issue again and it comes back around.”
The agreement came on a conference call on Tuesday, according to an official involved in the talks who asked not to be named in line with policy. It was confirmed by Slovak Finance Minister Peter Kazimir on Twitter. The European Commission earlier said that Greece’s list of policies was good enough to proceed.
The Greek stock market reopened on Tuesday after a holiday, and today’s rally sent its advance to 12 percent for the year. National Bank of Greece SA and Eurobank Ergasias SA jumped more than 14 percent. The ASE slipped 4.5 percent last week after two weekly gains.
Greek stock volatility has risen since former Prime Minister Antonis Samaras announced presidential elections in December. This year, the ASE had average daily moves of 3.4 percent through the end of last week, compared with 1.6 percent in 2014, data compiled by Bloomberg show. Bank shares have been even more volatile, rising or falling 7.3 percent on average in 2015, compared with 2.2 percent last year.
The list of commitments that Greece submitted includes maintaining current state-asset sales, consolidating pension funds to reduce costs and revamping tax collection and administration. The approval of the policies was a condition for extending the availability of bailout funds for another four months. The current program, which has been keeping Europe’s most indebted state afloat since 2010, was scheduled to expire at the end of February.