European stock markets ended three consecutive trading days of falls today on hopes that a fresh deal can be reached over a Cyprus bailout.
The FTSE 100 opened as much as 20 points higher before dropping back to be up 7.49 at 6448.81. The three-day fall had been the longest losing streak for the Footsie since November, following the crisis over the European Union’s planned €10 billion (£8.6 billion) bailout.
Brussels caused consternation in Cyprus with a plan to impose a one-off levy on bank deposits but last night’s unanimous decision by the country’s parliament to reject the EU proposal has fuelled optimism.
Traders now think a more palatable deal can be reached.
But the European Central Bank has warned it will not provide Cypriot banks with liquidity indefinitely unless a bailout is agreed.
Austrian finance minister Maria Fekter has also said banks on the Mediterranean island may not be able to reopen this week as a result.
She suggested bondholders of major Cypriot banks might have to take a hit, known as a “haircut”, if savers are not going to see their deposits cut.
“We will certainly help the Cypriots but only under conditions that make sense,” she said.
“You cannot explain to Austrian taxpayers why we should be securing Russian oligarchs’ deposits or British money.”
