February 7, 2012 / 4:53 PM / in 6 years

European shares cut losses on Greek deal optimism

LONDON (Reuters) - European shares slipped on Tuesday but cut losses in late trade to stay near six-month highs on optimism that Greece is finally making progress towards a deal that will help it avoid a chaotic debt default.

Greece’s government is preparing a document with a list of painful reforms needed to clinch a new financing package, a government official said.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares fell 0.3 percent to a provisional close of 1,072.19 points, having been as low as 1,065.07 earlier.

Banks, many of which have significant exposure to peripheral euro zone countries, reversed losses and finished higher. The STOXX Europe 600 euro zone Banking Index .SX7E rose 1.3 percent. BNP Paribas (BNPP.PA) and UniCredit (CRDI.MI) rose 2.1 and 4.7 percent respectively.

“It’s moved back up on Greece. It’s giving investors a nice excuse to buy back in having taken some profits off the table in the last couple of days,” said Joshua Raymond, Chief Market Strategist at City Index.

However, Swiss bank UBS UBSN.VX, down 1.4 percent, was among companies falling as earnings came in below forecasts.

Reporting by Brian Gorman

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