Stocks rally as euro slides for second day

Equity markets were buoyant on Tuesday as investors ignored mounting fears of a Greek default.

After US stocks bounced back on Monday, indices in Asia rallied overnight following China’s unexpected stimulus move that saw its central bank lower the reserve requirement on banks.

China's Shanghai Composite index rose 1.8 per cent to a new seven-year closing high, while the Nikkei was up 1.4 per cent to close just short of the key 20,000 handle.

European markets joined the party, with the Dax up one per cent around the 12,000 mark and the FTSE 100 also rising strongly, as Sky shares climbed to a 14-year peak on strong third-quarter figures.

The euro was lower as the fractious negotiations between Greece and its creditors continued to show little sign of an agreement, while a report showed investor confidence in Germany fell this month.

Tellingly, Greek banking stocks fell again and have shed half their value in the last six weeks as investors fear the country may have to exit the single currency bloc.

The Athens bourse hit its lowest since January, while Greek bond yields soared to fresh peaks as Bloomberg reported that the European Central Bank is losing patience with the country and may pull the plug on Greece’s banks.