Stocks hit record highs on Greek accord, euro gains

Fri Feb 20, 2015 4:53pm EST
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By Herbert Lash

NEW YORK (Reuters) - The euro rebounded against the dollar and equity markets around the globe surged to record highs on Friday after euro zone finance ministers agreed in principle to extend heavily indebted Greece's financial rescue by four months.

Investors had awaited a deal all week. As talks for a deal progressed, Germany's DAX index hit a record intraday high and Britain's top share index closed within 0.5 percent of a 15-year high before the accord was announced.

The euro rebounded and the benchmark 10-year U.S. Treasury note retreated. Europe's leading equities index closed at seven-year highs in anticipation a deal would be reached.

The Greek accord will allow investors to concentrate on the fundamentals that should be driving the market, said Ben Pace, chief investment office at HPM Partners in New York.

"You're seeing a little bit better U.S. economic statistics than you've been seeing over the past three or four weeks. The European statistics have gotten a lot better too," Pace said. "So maybe a relief rally today, because the markets were down as there was a lot of consternation going around."

Surveys indicated on Friday that the euro zone's private sector expanded in February at its fastest pace in seven months, though companies continued to cut prices, suggesting low inflation remains a challenge for policy-makers.

The euro pared losses against the U.S. dollar to trade up 0.1 percent at $1.1377. Against the yen, the dollar pared losses to trade up 0.13 percent at 119.09.

MSCI's all-country world equity index rose 0.34 percent, while the European FTSEurofirst 300 index of top regional shares closed up 0.33 percent at 1,525.21.   Continued...

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange February 18, 2015. REUTERS/Staff/remote