LONDON (ShareCast) - -Greek bailout approval expected on Monday.
-Equities rise on hopes for final Greek deal.
-Strong day for construction stocks.

FTSE-100: 0.33%
Dax-30: 1.42%
Euro Stoxx 50: 1.24%
Cac-40: 1.37%
Ibex 35: 1.16%
Mibtel: 1.08%

Sources from within the German government have indicated Greece will probably get the bailout money it needs to avoid bankruptcy following a meeting of Eurozone finance ministers in Brussels on Monday.

The final deal will have several strands but is likely to involve an up front provision of around €30bn from the European Financial Stability Facility (EFSF) to reassure private bond holders that they will get at least some of their money back.

If agreed the total allocation to Greece will be €130bn.

The sense that Greece will not go bust on March 20th, when it is due to pay back €14.5bn in bonds has seen most European equity markets rise although whether the country can continue in the Eurozone under crippling debts is a moot point.

Under current estimates the country will struggle to bring its debt to GDP ratio to 120% by 2020. In other words, Greeks may still face a reckoning on whether staying in the Eurozone is worth the prospect of slow growth into the indefinite future and reduced life chances for its citizens.

EQUITIES

The totemic stock on European markets on Friday was French aggregates and cement firm Lafarge which reported adjusted fourth-quarter revenues 3% up on 2010, significantly ahead of expectations. The results had an impact across the construction sector.

Aegon, the huge Dutch insurance company, jumped 7% after saying it is targeting a boost in underlying pre-tax profits of 10% every year until 2015.

Finmeccanica, the Italian aircraft firm rose 16% after revealing a $1bn order from the Israeli air force.

The strongest sector on the Stoxx Europe 600 was construction and materials, which ended the day up 2.9%. The weakest sector was healthcare, dropping 0.47%.

MACROECONOMY

German producer prices rose 0.6% month-on-month in January (Consensus: 0.3%).

Eurozone construction output grew by 0.3% month-on-month in December.

OTHER MARKETS

The Euro/dollar had gained 0.17% by 5.55pm in Frankfurt to hit 1.3152 dollars.

Front month Brent futures had fallen 0.9% to $119.02 per barrel by 4.44pm in London.


BS

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