Spanish stock market rises and risk premium falls after Greek deal
Euro revalues against dollar after announcement of negotiations for a third rescue
The Spanish stock market began the week on a strong note following news of an 11th-hour European deal over Greece’s third bailout package.
Just half-an-hour before markets opened across the continent, with negotiations still underway in Brussels, everything seemed to indicate that shares would trade down on the lack of progress over the Greek crisis.
But as soon as news of the deal spread, the blue-chip Ibex 35 surged forward more than 1%, while all the main European stock exchanges – except for the Italian one – also moved upwards.
Meanwhile, the gap between Spanish and German 10-year borrowing costs dropped to 113 basis points on the news. This is lower than it was when Greek Prime Minister Alexis Tsipras announced a referendum on the EU’s conditions to prolong the second bailout.
The euro, for its part, gained against the dollar and traded at $1.116.
