Stocks subdued after gaining on Greece bailout extension

An overall positive tone has settled on markets following the confirmation that Greece will receive an extension to its bailout, however, after several indices smashed record highs in trading on Tuesday, equity indices in Europe are hovering close to neutral.

Signals from the US Fed’s Janet Yellen that the central bank would not rush raising interest rates also helped keep sentiment lifted in Wednesday’s morning session.

Shares in Europe gained a lift late in the session on Tuesday, after European officials approved the reform package proposal from Greece that it was required to submit in order to be granted a four-month reprieve from having to pay back its debts.

The main stock market in Athens rocketed nearly ten per cent to hit a three-month high in Tuesday afternoon trading, Germany’s DAX closed at its highest level ever and so did the UK’s FTSE-100, which closed at a record high after touching an all-time high during the day.

Now that the dust over the negotiations between Greece and its European creditors has settled, focus can turn back to other important issues in the global economy. The European Central Bank (ECB) is due to meet next week on March 5th and will surely reveal further details of the bank’s quantitative easing scheme, which will renew the battle against falling inflation.

The meeting will also provide an update on projections for the ailing economy in the single currency region, which are expected to renew pressure on the ECB’s president, Mario Draghi, to elaborate on the stimulus scheme.

There is little on the data agenda to give markets direction on Wednesday and attention will likely be focused on the US, where Janet Yellen, the Federal Reserve chair, indicated that the central bank will continue to remain patient about raising interest rates.

It seems as the US economy continues to post robust results which highlight the strength of its recovery, investors will be remain avid watchers for any hints on the timing of the first rate rise from the US central bank.