Shares buoyed on conditional Greek deal

European stocks recovered on Monday after European officials bashed out a conditional deal with Greece late on Friday last week. Risk appetite improved a little as markets allowed some optimism to creep back in after weeks of negotiations had failed to deliver any agreements.

The conditional deal hinges on the Greek government submitting a package of reforms today that will have to approved by eurozone members for the bailout extension to be ratified. If the reforms are approved, Greece will be granted a four-month extension on its debt repayments.

By midday, Germany’s DAX was up a little under 0.5 per cent, the CAC 40 was around 0.3 per cent higher and the Euro Stoxx 50 rose nearly 0.6 per cent.

Traders have taken heart that the chance of Greece exiting the European Union (EU) is now off the cards for the next few months at the very least, which is sending equities higher and boosting investor appetite for riskier assets. The euro also rose on the news, marching up to a five-week high against the safe-haven Swiss franc.

Elsewhere around the world, share indices are on the up. Japan’s Nikkei 225 index hit a 15-year high and the UK’s FTSE also reached the same peak.

Britain’s top 100 share index rose to a 15-year high on Monday, however failed to reach a new all-time record high despite the boosted market sentiment. The FTSE was dragged lower by poor results from HSBC, where the largest bank in Europe reported a 17 per cent decline in annual profits earlier on Monday morning.

Oil prices also appreciated a little on the overall positive tone, however, failed to sustain any rally after last week saw inventories reach record highs. Oversupply continues to be one of the main concerns in energy markets, which saw the price of Brent crude drop below the $60 per barrel handle once more.