Europe shares up after fresh debt relief deal for Greece

European equities jumped to a four-week high

yesterday as banks were buoyed by progress on talks towards securing a debt relief deal for Greece, while energy shares rose after a rally in oil.

Banking stocks rose across Europe after euro zone finance ministers unblocked €10.3 billion of new funds for Greece. DUBLIN The Iseq index closed up 1.3 per cent in Dublin, following gains for its biggest stocks. Building materials group CRH rose 1.5 per cent to €27.31, while Ryanair finished the session up 1.4 per cent at €14.05.

Bank of Ireland closed at 26 cent, adding 5.2 per cent in line with more positive sentiment towards financial stocks across Europe. Paper and packaging group Smurfit Kappa was also among the gainers, rising 1.1 per cent to €24.76.

Total Produce advanced 3.7 per cent to €1.70 after the fruit distributor released an upbeat trading statement, in which it said its full-year adjusted earnings per share would be in the upper half of the previously announced 10.50-11.50 cent range.

Fyffes rose 2.2 per cent to €1.59. However, there were falls for Glanbia, Kingspan and Dalata. LONDON The FTSE 100 finished 0.7 per cent higher, lifted by gains at banks and oil companies, but it underperformed other major European indices.

Marks & Spencer slumped more than 10 per cent after a disappointing trading update and was the worst performer on the blue-chip index. It warned of a short-term hit to profit as it pushes through a plan to turn around its underperforming clothing and homeware business, while analysts at Cantor Fitzgerald said they still had concerns about the company's ability to reverse the declines.

Royal Bank of Scotland led the gainers, rising 4.4 per cent, while HSBC Holdings was up 2.8 per cent. Oil firms rose as the price of oil edged towards $50 a barrel, with BP and Royal Dutch Shell adding 2.3 per cent. Product testing firm Intertek was down 5.6 percent, hitting a one-month low after reporting softer organic growth.

EUROPE The FTSEurofirst 300 and the STOXX Europe 600 index both touched their highest levels since late April, climbing 1.3 per cent to add to the previous session’s jump of more than 2 per cent. In Germany, the Dax rose almost 1.5 per cent, while France’s Cac 40 finished up 1.1 per cent.

The euro zone banking index was up 3.6 per cent, led by lenders in the periphery. Shares in Caixabank, Banco Popular and Santander surged between 5.8 per cent and 7.3 per cent. Deutsche Bank gained 3.4 per cent, with some traders citing positive broker comments from JP Morgan.

The top Greek index rallied in early deals as sovereign yields fell on the deal. It had been set to post its highest close since December 2015, until a late pullback saw it end flat.

Energy shares were in demand after US crude oil hit its highest level in more than seven months, after industry data suggested a larger-than-expected drawdown in US crude inventories last week. The STOXX Europe 600 Oil and Gas index rose 2.5 per cent.

US Wall Street stocks were higher in afternoon trading, extending gains from Tuesday as oil prices rose and investors became more comfortable with the prospect of an interest rate hike as early as next month.

The S&P financial index was up 0.95 per cent, after hitting its highest this year in morning trading. Bank of America, JPMorgan and Citigroup were up between 1.5 and 2 per cent.

Among energy stocks, Chevron was up 1.21 per cent, while Transocean and Chesapeake Energy gained more than 5.1 per cent. Shares of Computer Sciences soared 34.5 per cent to $47.90 after Hewlett Packard Enterprise said it would spin off and merge its struggling IT services business with the company. Hewlett Packard Enterprise was up 9.1 per cent at $17.73.– (Additional reporting: Reuters)