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FTSE 100 rises 1.6% on hopes of a solution to Greek crisis

Leading shares have added to recent gains on renewed hope that the Eurozone crisis can be handled with a dramatic default by Greece.

The soothing words on Wednesday from France and Germany that Greek should remain part of the Eurozone seems to have done the trick, at least for now. But with talk of the European Commission perhaps cutting growth forecasts and a meeting of finance ministers in Poland on Friday to discuss Greek – with the worried Americans in attendance – investors’ nerves are still fragile.

But at the moment the FTSE 100 is up 90.06 points at 5317.08, with the French and German stock markets up more than 1.5%. The euro steadied at around .3755. Simon Denham at Capital Spreads said:

Bulls must be thinking the near term resistance around 5325 is a possible target, which our quote actually hit towards the end of the Dow’s session last night.

A lot is riding on tomorrow’s meeting in Poland which is also being attended by the US Treasury Secretary Timothy Geithner. Calls from the US and China are becoming more frequent and louder for Europe to sort its problems out, as they after all (and the rest of the global economy for that matter) have so much riding on the matter.

Until then markets may continue to just gain a little ground as the hopes build, but if the desired outcome isn’t achieved, there could be another almighty move to the downside.

Imperial Tobacco is the only faller, down 12p at £20 on concerns about trading. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds