Greek shares rally on bailout extension expectations
* FTSEurofirst 300 up 0.2 pct, hits 7-year high * Greek bank shares still below level of before Syriza election * Europe enjoys best earnings season in nearly 4 years By Blaise Robinson PARIS, Feb 24 (Reuters) - Greek shares surged on Tuesday, outpacing modest gains in pan-European indexes after Athens delivered a list of economic reforms to the euro zone that it hopes will secure a four-month extension of its financial lifeline. Volatile Greek banking stocks were the top gainers across Europe, with National Bank of Greece up 13.9 percent, Alpha Bank up 13 percent, Bank of Piraeus up 11.2 percent and Eurobank up 10.7 percent, as the Greek market reopened after a three-day weekend. Despite its recent rebound, the Greek banking sector index is still below the level it traded at before last month's election victory by the anti-austerity Syriza party, which has reignited investors' worries about the country's debt pile. The sector has lost 85 percent since early 2012, reducing the combined market value of Greece's top four banks to 17.8 billion euros ($20.1 billion), less than a fifth of the value of Spain's Banco Santander, the euro zone's biggest bank. At 1145 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,537.76 points, a level not hit for seven years. The list sent to the Eurogroup late on Monday set out in broad terms the measures Athens plans to implement by July, offering assurances it will not deviate from fiscal targets or roll back past reforms. The six-page document, seen by Reuters, contained few figures but promised to improve tax enforcement, fight corruption and "review and control ...every area of government spending". Investors remained sceptical, however, unwilling to chase European stocks higher after hefty gains made since the start of the year. The FTSEurofirst 300 is up 12 percent in 2015. "The situation is fairly exasperating. There is not a single number or target in that list," said Ioan Smith, managing director of KCG Europe. "We've been in similar situations during the euro zone crisis, where it seems like the can is being kicked down the road with nothing really changing. With the day-to-day volatility in Greek markets at the moment, people are playing the markets daily for a fast return." Elsewhere in Europe, shares in chip-making equipment builder ASML rose 3.8 percent and hit a record high after the company announced it had passed a key performance milestone. Shares in BHP Billiton rose 4.6 percent, driving a sector rally, after the global miner beat market forecasts by posting a smaller-than-expected drop in half-year profit. Half way into Europe's earnings season results have been strong, with 57 percent of companies meeting or beating profit forecasts. Overall, fourth-quarter earnings are expected to grow by 19.5 percent, according to Thomson Reuters I/B/E/S, which would be Europe's best season in 3-1/2 years. "Economic activity is accelerating in Europe," said Mathieu L'Hoir, strategist at AXA Investment Managers, which has 607 billion euros ($686 billion) in assets under management. "The impact from the drop in energy costs and the lower euro combined should translate into a boost of about 0.5 percentage points to euro zone GDP... This will help companies restore their profit margins, which remain at recession levels," he said. Europe bourses in 2015: link.reuters.com/pap87v Asset performance in 2015: link.reuters.com/gap87v Today's European research round-up (additional reporting by Alistair Smout in London; editing by John Stonestreet)
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