Conditional Greek deal boosts markets

Investor appetite for riskier assets returned on Monday, after a conditional bailout extension for Greece was hammered out late Friday. Cautious optimism entered financial markets, returning on the hope that weeks of negotiations between European and Greek officials would finally be resolved.

The conditional deal hinges on a package of reforms that eurozone members will have to approve. If the package passes inspection, Greece will gain a four-month extension on its debt repayments.

It means that Greece will not be exiting the European Union in the immediate term, which will allow markets to settle down in the meantime. This positive tone sent equities higher and boosted 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.

European optimism spilled over into the UK markets and lifted the FTSE to a 15-year high. Britain’s top 100 share index now trades close to its record all-time high, however, was dragged lower by poor results from HSBC. Europe’s largest bank reported a 17 per cent decline in annual profits on Monday morning.