Europe: Stocks rebound after volatile session

[LONDON] Europe's main stock markets closed higher Monday, rebounding after a volatile session marked by concerns about resolving Greece's cash crisis.

London's benchmark FTSE 100 index of top companies gained 0.12 per cent to end the day at 6,968.87 points, while in Paris, the CAC 40 index rose 0.37 per cent to 5,012.31 points compared with Friday's close.

Frankfurt's DAX 30 climbed 1.29 per cent to 11,5594.28 points, taking back some of the more than two per cent the index lost last week.

And in Greece the Athex Composite index closed up 1.62 per cent, following reports the Greek government was being "more constructive," said Craig Erlam, senior market analyst at Oanda.

"Weakness in the euro this afternoon is probably also helping to lift stocks in Europe, with exporters benefiting from weaker currency making them more competitive. This is likely to play a big role in their recovery this year," he added.

The European single currency Monday fell to US$1.1353 from US$1.1446 late in New York on Friday, after hitting a more than three-month high at US$1.1467.

Greece said Monday it wants to reach a loan deal with its EU-IMF creditors by the end of May to resolve an acute cash shortage.

Greece's new radical Syriza-led government and its EU-IMF creditors have been stuck in a deadlock for four months over the reforms needed to release a final 7.2 billion euros (US$8.2 billion) in bailout funds.

The delay has led to concerns Athens is running critically short of cash and may soon end up defaulting, which could set off a messy exit from the euro.

Over the weekend, Greek newspapers reported that the country came close to not making a 750 million euro debt repayment to the International Monetary Fund last week.

Later Monday, To Vima daily reported a European Commission proposal to break the deadlock.

It offered to give Athens a combined 3.7 billion euros next month in EU and ECB funds from the ongoing bailout in return for legislation on fiscal measures worth five billion euros, To Vima said.

Both the Greek government and the European Commission could not confirm the proposal in To Vima's report.

"We are not aware of such a proposal. We continue to work towards a comprehensive deal, together with the ECB and the IMF, as well as the Eurogroup. Progress is being made, albeit at a slow pace," Commission spokeswoman Annika Breidthardt said in Brussels.

Meanwhile, European economic affairs chief Pierre Moscovici, while lamenting that Greece seemed more interested in ditching promised reforms than suggesting alternatives, said "some progress" had been made in talks in recent days.

Mr Moscovici insisted that the "only scenario we consider at the (European) Commission is a strong Greece in the eurozone." He added that "nobody is working on others. We all consider that it's possible to reach an agreement." -

"This week really is an important one for Greece," said dealer Alistair Cotton at traders CurrenciesDirect.

"Reports out over the weekend suggest that it was a struggle for Greece to make its recent 750-million-euro payment to the International Monetary Fund, and it's likely it won't be able to pay the next instalment due on 5 June." Around 1.5 billion euros are now due to the IMF in June, including 302.5 million euros on June 5.

"An EU leader's summit on Thursday and Friday (21 - 22 May) might see the proposal of an extension to payment terms," added Mr Cotton.

Most of Asia's key markets diverged Monday following a strong end to last week and another record close on Wall Street.

Shanghai shed 0.58 per cent and Sydney fell 1.33 per cent, but Tokyo ended 0.80 per cent higher and Seoul gained 0.34 per cent.

Wall Street was meanwhile slightly higher around mid-day in New York.

The Dow Jones Industrial Average added 0.09 per cent to 18,288.90 points, while the S&P 500 index rose 0.17 per cent to 2,126.32.

The tech-rich Nasdaq Composite Index gained 0.36 per cent to stand at 5,066.44.

AFP