European equities gain on imminent acceptance of debt deal by Greece

EUROPEAN shares extended gains after a report that Greece was ready to accept most conditions from its international creditors to clinch a debt deal.

The Financial Times, citing a letter Alexis Tsipras sent to the heads of the European Commission, the IMF and the European Central Bank, reported the Greek prime minister will accept all his bailout creditors’ conditions that were on the table this weekend, with only a handful of minor changes.

However, the status of the deal remained deeply uncertain, with Germany saying it could not negotiate while Greece was headed for a referendum on the aid-for-reforms deal.

“If it’s true and a possible debt deal eliminates the ‘Grexit’ idea, then it’s a big positive for the market. But I remain sceptical and would like to see some concrete action and official announcements before becoming bullish,” Ronny Claeys, senior strategist at KBC Asset Management in Brussels, said.

The euro zone’s blue-chip Euro STOXX 50 index was up 1.8 percent by 1455 GMT after falling 1.3 percent a day earlier and slumping more than 4 percent on Monday on alarm about Greece. The pan-European FTSEurofirst 300 index was up 1.5 percent, while Germany’s DAX gained 2 percent.

The indexes came off the session’s highs after Tsipras reiterated a call for Greece to vote “no” in a referendum on Sunday and reject the international bailout.

Across Europe, Britain’s FTSE 100 rose 1.3 percent. France’s CAC, up 1.7 percent, supported by a survey showing France’s manufacturing sector grew in June for the first time since April 2014.

Carmakers topped the gainers’ list in Europe, with the STOXX Europe 600 Automobile and Auto Parts index rising 2.7 percent. It was supported by a positive sector note from Exane, which upgraded its stance or raised the price target for Peugeot , Renault, Daimler, Continental , Porsche and Volkswagen.