European Markets at Close Report by MarketWatch on June 18, 2015: European stocks swing higher;Greek drama persists

European stocks swing higher;Greek drama persists

Sara Sjolin
European stocks reversed course and ended modestly higher Thursday, aided by a U.S. stock rally as investors embraced the prospect of a slow pace in interest-rate increases.

The Stoxx Europe 600 index SXXP, +0.13%  closed up 0.1% at 384.22, avoiding what could have been its lowest closing level in four months.

The pan-European benchmark swung higher in afternoon trade, tracking a rally in U.S. stocks SPX, +1.07% DJIA, +1.17%  after the U.S. Federal Reserve on Wednesday indicated that its pace of rate hikes will be gradual.
“European investors were taking their cues from a very positive U.S. session,” and that U.S. monetary policy “will be looser for longer,” said Michael Hewson, chief market analyst, at CMC Markets.
“What you are seeing in Europe is a little bit of light bargain hunting, but if you look at the bigger picture, nothing has changed,” in terms of the deadlock between debt-laden Greece and its creditors.
The Eurogroup of eurozone finance ministers was meeting in Luxembourg late Thursday, but ahead of the meeting, the Eurogroup’s chief dashed hopes that a debt deal for Greece would be reached. Also ahead of the meeting, Greek Prime Minister Alexis Tsipras has said he’ll reject any deal that imposes “catastrophic” policies on the debt-laden country, dashing hopes of an agreement.
The Stoxx Europe 600 benchmark has shaved off 3.9% in June so far, with the turmoil in Greece hitting investor confidence. Athens is still struggling to reach a reform agreement with its lenders, which would unlock the next portion of bailout money needed to repay 1.6 billion euros ($1.82 billion) to the International Monetary Fund by the end of June.
If nothing comes of the Eurogroup meeting “we would expect a last attempt at the top political level thereafter to break the impasse,” said Holger Schmieding, chief economist at Berenberg, in a note.
Greece’s Athex Composite Index GD, +0.37%  rose 0.4% to 683.43, climbing back after closing at the lowest level since 2012 on Wednesday.
Other markets: Germany’s DAX 30 index DAX, +1.11%  turned higher to end up 1.1% at 11,100.30, while France’s CAC 40 index PX1, +0.27%  rose 0.3% to 4,803.48. The U.K.’s FTSE 100 index UKX, +0.41%  also swung higher, ending up 0.4% at 6,707.88.
The euro EURUSD, +0.3616%  fetched $1.1401, up from $1.1338 late Wednesday in New York.


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