By Carla Mozee, MarketWatch
European stocks finished higher Friday following reports that a
deal to unlock bailout funds for debt-burdened Greece may be
possible over the weekend. But developments as trading wrapped up
for the week suggested that bridging the gap between Greece and its
creditors at a meeting Saturday will remain difficult.
The Stoxx Europe 600 ended up a modest 0.1% at 396.85, with
financials the best-performing sector. But losses for energy,
technology and industrial shares kept the market's overall gain in
check.
Stock indexes turned higher following media reports that
Greece's creditors planned to extend
(http://www.marketwatch.com/story/greeces-lenders-plan-five-month-bailout-extension-reports-2015-06-26)
the debt-laden country's bailout program by five months and release
rescue funds of 15.5 billion euros ($17.38 billion). Greece's Athex
Composite closed up 2% at 797.52 after being down by more than 1%
at one point in the session.
Greek government bond prices climbed, pulling down the yield on
2-year debt by 1.6 percentage point to 19.91%, according to
Tradeweb. The yield on 10-year bonds fell 26 basis points to
10.53%.
But late Friday, state-run Athens News Agency reported the Greek
government rejected the bailout-extension proposal, calling it
inadequate (http://www.amna.gr/english/articleview.php?id=10259).
The euro fell 0.6% against the U.S. dollar late Friday.
Ahead of that news, German stocks had swung higher, leaving the
DAX 30 up by 0.2% at 11,492.43, and France's CAC 40 ended up by
0.4% at 5,059.17.
Read: Greece standoff could drag on regardless of deal, document
reveals
(http://www.marketwatch.com/story/greece-standoff-could-drag-on-regardless-of-deal-document-reveals-2015-06-26)
Greece needs an economic-reform deal in place before it can tap
a new round of bailout funds. Eurozone finance ministers were set
to meet Saturday to work on a deal, with German Chancellor Angela
Merkel saying that the weekend gathering should have "decisive
significance."
(http://www.marketwatch.com/story/greek-deal-talks-at-weekend-will-have-decisive-significance-says-merkel-2015-06-26)
Greek pensions, sales taxes and military spending have been major
areas of disagreement.
If Greece misses a EUR1.5 billion ($1.68 billion) debt repayment
due Tuesday to the International Monetary Fund, the Hellenic nation
will immediately be in arrears
(http://www.marketwatch.com/story/imf-greece-would-immediately-be-in-arrears-if-it-misses-june-30-payment-2015-06-25)
on its debt to the institution, the IMF warned Thursday.
Among other national markets, Spain's IBEX 35 moving up 0.5% to
11,372.30, and Italy's FTSE MIB gained 0.6% to 23,800.47. But the
U.K.'s FTSE 100 fell 0.8% to 6,753.70.
The pan-European index for the week rose 2.9%, with much of the
heavy lifting coming at the start of the week when a Greek
government proposal on economic reforms was met with encouraging
feedback from some European officials. But optimism in the markets
began to fade after Greece's creditors rejected the proposal.
In company news, shares of K&S AG (SDF.XE) rallied 29.6%
after Canada's Potash Corp. (POT) (POT) proposed a takeover
(http://www.marketwatch.com/story/ks-says-potash-has-submitted-acquisition-proposal-2015-06-25-16485272)
of its fertilizer-business rival.
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