The ASX 200 follows the strong overnight performance of international markets as Greece’s new proposal sparked hopes that a deal can be reached before June 30.
ASX 200 is up 1.3 per cent at 71 points around 11:40 am (AEST) and the broader All Ordinaries Index has gained 0.96% so far today. All sectors are currently up with the exception of Staples. The banks are leading the rally with Commonwealth Bank (ASX:CBA) up 2%, Westpac (ASX:WBC) gaining 1.8%. ANZ and Nab have climbed 1.8% and 1.4% respectively.
Eurozone Finance Ministers have welcomed the plan and called it a ‘good base to negotiate’. Greece’s leaders and its creditors met on Monday evening in Brussels in another emergency meeting to discuss the proposal. Whilst discussions may conclude with a last-minute resolution French President Francois Hollande has warned that ‘not everything has been resolved’. Meanwhile anti-austerity protesters have gathered once again in front of the Greek parliament in Athens.
Greek Prime Minister Alexis Tsipras said "we want an overall and viable agreement which will be accompanied by a strong and front-loaded growth package and at the same time will make economy sustainable."
The international markets have given a clear answer to the question if a deal can be reached. European markets have gained strongly overnight with the German Dax jumping 3.8% and Greece’s ASE Index rising as much as 9%. However, Greece’s benachmark index is still down 40% so far this year.
Whilst a deal has not been signed off yet, it appears very likely now that the negotiations, which lasted more than five months, will each a ‘happy ending’. If the deal can be reached the European Commission, the IMF and the European Central Bank (ECB) will unlock €7.2bn of bailout funds and Greece will be able to pay its bills. The strategy of the Syriza party may be controversial and arguable, however the latest proposal shows that even the left-wing party wants to avoid a default under all circumstances. Greece is saying ‘the ball is now in your court’ and as we know that German Chancellor Angela Merkel wants to keep Greece in the Eurozone, the lethargic negotiations should finally come to an end.
Author: Simon Herrmann
Jun 23, 2015
Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.