ECONOMY

Europe stocks extend 2007 high as Greek shares jump on aid deal

European stocks extended a seven-year high as Greece reached a bailout deal and the Federal Reserve pledged patience on raising interest rates. Greek shares surged.

The Stoxx Europe 600 Index rose 0.6 percent to 385.31 at 4:32 p.m. in London. The ASE Index surged 9.8 percent as euro- area leaders approved a continuation of Greece’s bailout funds for four more months. Greek stocks rose to the highest level since Dec. 8, following a market holiday on Monday, as National Bank of Greece and Alpha Bank AE rallied at least 17 percent.

“Today is a huge relief for the banks, which are a big part of the index, because part of the story is that they will be kept afloat,” said Jean-Paul Jeckelmann, chief investment officer at Banque Bonhote & Cie. in Neuchatel, Switzerland, referring to Greek equities. “Yellen signaling the Fed will be patient in raising rates was the final good news that we wanted today after Greece.”

European stocks extended gains as Fed Chair Janet Yellen said the central bank will be flexible about the timing of an interest-rate rise even after it changes its forward guidance. She reiterated in a testimony before the Senate Banking Committee that an increase is unlikely for “at least the next couple” of meetings. The gauge has climbed 13 percent in 2015.

BHP Billiton Ltd. rose 6.6 percent as the world’s biggest mining company raised its dividend, reported earnings that beat analysts’ projections and said it will cut costs. Telefonica Deutschland Holding AG advanced 1.2 percent after annual sales beat estimates.

Finmeccanica SpA dropped 0.7 percent after its chief financial officer said the company won’t pay a special dividend after selling some units to Hitachi Ltd. and forecast 2015 net debt of about 3.4 billion euros ($3.8 billion). Trading was briefly halted in Milan after the shares fell 3.6 percent. The stock earlier rose as much as 4.5 percent as the Italian firm and Hitachi announced the deal.

Tungsten Corp. tumbled 21 percent, the most since it first sold shares to the public in October 2013. Delta Lloyd NV slid 3.8 percent after saying operating income fell in 2014.

[Bloomberg]