Upbeat earnings lift stocks, Greek anxiety hits euro

Wednesday, 22 April 2015 00:00 -     - {{hitsCtrl.values.hits}}

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange - REUTERS     LONDON (Reuters): World stocks climbed back towards all-time highs on Tuesday as upbeat European earnings reports and expectations of a sixth straight rise in German business confidence helped offset worries about a possible Greek default. European trading started strongly with the pan-regional FTSEurofirst 300 index up over 0.6% in early deals, after a 1.4% jump by the Nikkei in Tokyo and a 2 to 2.5% rises in China’s main markets had lifted Asia. Publicis, Sky, ARM Holdings were all up more than 4% after reporting results, with the overall picture of a weaker euro and improving economic conditions - driven by the European Central Bank’s bond-buying stimulus plan - drawing investment flows into equity markets. Germany’s closely-watched ZEW business confidence indicator, due at 0900 GMT, was expected to confirm the brighter picture in Europe’s biggest economy, with its sentiment gauge seen rising to 55.3 from 54.8 and current conditions to 56.0 from 55.1. “In macro terms at least, the worst of the crisis looks like it is over for the euro zone and certainly my own ‘misery indices’ are looking less bad,” said Neil Williams, chief economist at fund manager Hermes in London. On the ZEW, he added: “The euro will have helped confidence... but Greece should still remain on the radar with it looking like it is going to have to restructure its debt.” Even after several rounds of negotiations, hopes are slim that Athens will be able to convince euro zone finance ministers to continue their financial support at the latest in a series of meetings on Friday. The country could run out of cash by the end of the month. On Monday, the government ordered state entities to park spare cash at the central bank in a bid to pay civil service salaries and IMF loan repayments due in early May. The euro had dropped to $ 1.0670 by 0800 GMT, well off Friday’s peak of $1.0849, while Greece’s 2-year bond yields were closing in on 30% and benchmark 10-year yields rose to 13.58%. An unprecedented debt default in the currency bloc could open the way for Greece to exit the euro, though ECB Vice President Vitor Constancio said on Monday that a country that defaults would not have to leave the euro. The dollar pushed up for a third straight day, trading at 98.385 against a currency basket. Moving in the opposite direction, the Australian dollar tumbled to $ 0.7685 from $ 0.7723 after the minutes of the Reserve Bank of Australia’s (RBA) April meeting showed the bank putting rate cuts on the table. Oil and gold prices fell back as the dollar strengthened. Brent dipped to $ 62.90 per barrel, while US crude eased to $ 55.94, not far from last week’s four-month high of $ 57.42.