Bloomberg News

Most European Stocks Advance; Greek Banks, Vodafone, Volvo Gain

July 22, 2011

July 22 (Bloomberg) -- Most European stocks rose as euro- area leaders announced a new aid package for Greece and measures to prevent bond yields increasing further in Spain and Italy.

Greek banks climbed with the Mediterranean nation’s four largest lenders all surging more than 9 percent. Vodafone Group Plc gained 2 percent after posting better-than-estimated service revenue growth. Volvo AB jumped 3.3 percent as the world’s second-biggest truckmaker reported second-quarter results that beat expectations.

The Stoxx Europe 600 Index rose 0.2 percent to 271.1 at 3:31 p.m. in London. The gauge has rallied 1.6 percent this week amid optimism that the new aid package will stop the sovereign- debt crisis spreading to the larger economies of Spain and Italy.

“The general view is that it appears to be a comprehensive deal that exceeded market expectations,” said James Knightley, senior economist at ING Bank NV in London. “Consequently, we are seeing something of a relief rally. However, the underlying economic fundamentals remain concerning.”

Euro-area leaders announced 159 billion euros ($229 billion) in new aid for Greece late yesterday and cajoled bondholders into footing part of the bill. Officials empowered their 440-billion euro rescue fund to buy the debt of stressed nations to help erect a firewall around Spain and Italy.

The Greek financing package will consist of 109 billion euros from the euro area and the International Monetary Fund. Financial institutions will contribute 50 billion euros after agreeing to bond exchanges and buybacks that will also cut Greece’s debt load, the leaders’ communique said.

--Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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