4th February 2015
Earlier in the week, the recently formed Greek government detailed its plans to restructure the nation’s debt, instead of asking for a haircut on the amount that it owes.
The announcement has rekindled hope that an amicable agreement will be reached between Greece and other members of the European Union, sending shares soaring.
Greece’s stock market rocketed over 11 per cent higher and European shares climbed more than one per cent.
The renewed optimism and growing appetite for riskier assets is quite surprising considering that nothing has yet been agreed or finalised with officials in Europe. Investors are choosing to focus instead on the fact that Greece is no longer asking for a complete write-off of its debt.
So far reports suggest that while talks are progressing between Greek and European officials, an agreement might be a long time in coming.
Despite this, it seems that markets believe that a deal is now inevitable and speculation will likely give stocks scope for further gains. However, if the talks lead to nothing, we can expect shares to come crashing back down to earth.
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