European shares close higher on hopes for Greece

European shares rose on hopes of a possible EU rescue plan for Greece, with banks stronger.

European shares close higher on hopes for Greece

European shares rose on Wednesday on hopes of a possible European Union rescue plan for Greece, with banks stronger, but gains were pared after U.S. Federal Reserve Chairman Ben Bernanke outlined fiscal tightening plans.

The FTSEurofirst 300 index of top European shares rose 0.5 percent to a provisional close of 986.05 points, its third day of gains.

The index is down 8.2 percent from a 15-month high it reached on Jan 11, but is still up more than 52 percent from its lifetime low of March 9, 2009. BNP Paribas, Banco Santander, Barclays, Deutsche Bank, HSBC and Societe Generale rose between 1.3 and 4.5 percent.

Credit Suisse rose 3.4 percent ahead of full-year results on Thursday.

Expectations of a rescue plan for Greece intensified as sources in Germany's coalition government said Berlin is in intense international and domestic negotiations about possible aid to debt-stricken Greece, but no decisions were imminent.

"The markets were higher on rumours of a bailout for Greece, but then it was all about Bernanke," said Heino Ruland, strategist at Ruland Research, in Frankfurt.

"It looks like he's doing what everybody expected, at least verbally tightening policy. I think we may move sideways for a while. We've had a correction. I don't see any reason for the market to move sharply higher or lower. It will depend on earnings."

The Fed could begin pulling back its unprecedented stimulus for the U.S. economy by first removing some cash from the financial system and then raising interest rates, Bernanke said in remarks prepared for a hearing of the House of Representatives Financial Services Committee.

Reuters

Last Mod: 10 Şubat 2010, 19:04
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