Greek
markets rebound ahead of euro zone meeting
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[February 10, 2015]
By Emelia Sithole-Matarise and Sudip Kar-Gupta
LONDON (Reuters) - Greek bonds and stocks
bounced back on Tuesday ahead of an emergency meeting of euro zone
finance ministers that some hope could be the first step to finding an
agreement to ease the standoff between Greece and its lenders.
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Finance Minister Yanis Varoufakis makes his debut meeting with euro
zone peers on Wednesday when he will outline Athens' demands for a
new debt deal that would allow it to shake off much of the austerity
imposed by a European Union/International Monetary Fund bailout
since 2010.
Athens also wants a "bridge agreement" until June to buy time until
a properly negotiated settlement, a demand that was rejected by the
head of the Eurogroup finance ministers Jeroen Dijsselbloem.
"We know it's going to be a tough period of negotiations but at
least they've got some sort of starting point," said Orlando Green,
a strategist at Credit Agricole.
"It's a game of chicken at the end of the day but it will eventually
result in one side bending more than the other but they both claim
victory."
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Yields on three-year Greek bonds fell by as much as 178 basis points
to 20.07 percent with five-year yields down 90 bps at 15.68 percent.
They remained far above 10-year equivalents which were 53 bps lower
at 10.78 percent reflecting investor concern that they may not get
all their money back. <0#GRTSY=TWEB>
Greek shares advanced, with the country's benchmark ATG equity index
rising 2 percent. Shares in its major banks also rose, with the
Athens Stock Exchange FTSE Banks Index rising 7.7 percent
early in the day before retreating to last trade 3.8 percent higher.
The Greek banking index is down about 30 percent since the start of
2015 but has bounced off record lows hit on Jan. 28.
The recovery remained fragile as Greek officials kept up their
rhetoric before Prime Minister Alexis Tsipras' confidence vote in
parliament that he is widely expected to win. Defence Minister Panos
Kammenos said if Greece failed to get a new debt deal with the euro
zone it could look elsewhere.
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Other European countries are also increasingly concerned about
potential fallout on their economies of a Greek exit from the euro
zone. British finance minister George Osborne said the danger of a
"miscalculation leading to a "very bad outcome" between Greece and
the euro area is increasing, Bloomberg reported.
Some analysts say both sides needed to strike some kind of
compromise to avoid the sharp selloff in Greek stocks and bonds from
spilling over to other markets.
"It would seem the market is taking a glass half full view of
Greece’s reported proposal - perhaps simply owing to the fact there
is a proposal at all," Rabobank strategists said in a note.
(Editing by Anna Willard)
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