Europe close: Stocks rally on receding Greek exit fears

LONDON (ShareCast) - European stocks jumped, with the FTSE 100 breaking above the 7000 level for the first time in its history. The London benchmark moved above the 7,000 mark in late afternoon trading in Europe as global equity markets advanced on receding Greek exit fears and dovish central banks.

The Federal Reserve on Wednesday said it would wait to raise interest rates until it sees further improvement in the labour market while the Bank of England's Andy Haldane alluded to the possibility of cutting rates if necessary.

Greek Prime Minister Alexi Tsipras was on Friday reportedly expected to present a detailed final list of reforms to unlock further aid from international creditors, soothing fears about the country's finances.

German Chancellor Angela Merkel and French President Francois Hollande said that Greece needed to speed up the process of implementing new measures.

"We have to take that at face value and say we trust that this will happen," Merkel told reporters on the sidelines of the EU summit in Brussels on Friday morning. "And then we'll see what comes." Royal Bank of Scotland (LSE: RBS.L - news) said that it expected tough negotiations but no Grexit.

"Several avenues of temporary funding remain, including issuing additional t-bills to banks if the ECB raises the cap and partial disbursement of the €7.2bn delayed programme tranche payment," the RBS analysts added. "We still don't believe a Grexit will occur, but the negotiation on reforms will be tough, with the potential for further headline risk, as we have discussed before." The Greek ASE Index increased 2.9%, as Alpha Bank AE and National Bank (NYSE: NBHC - news) of Greece SA climbed more than 12%.

Following the latest news out of Brussels, the euro currency surged by 1.72% against the US dollar to $1.0843. In economic data, German producer prices fell 2.1% year-on-year in February, compared to forecasts for a 2% drop.

UK public finances improved in February, the Office for National Statistics revealed, putting Chancellor George Osborne on track to meet his borrowing targets before the 7 May general election. Public sector net borrowing, which excludes state-controlled banks, totalled £6.9bn in February, a 34% drop from the previous year. Analysts had pencilled in a shortfall of £8.5bn.

Companies: Pirelli & C. SpA (Milan: PC.MI - news) , Zodiac Aerospace (Paris: FR0000125684 - news) Pirelli & C. SpA was a high riser after its biggest shareholder said it's looking to transfer its holding in the tyremaker to an unidentified partner for €15 per share.

Zodiac Aerospace declined after the aeronautical-equipment manufacturer warned that first-half current operating income will be affected by costs due to problems in its Seats business.

Lafarge (Paris: FR0000120537 - news) and Holcim (Other OTC: HCMLF - news) gained after agreeing a $40bn merger to form the world's biggest cement company. CRH , which agreed to buy assets in the companies, also rallied.

Tullow Oil (LSE: TLW.L - news) jumped after saying it received a fresh $450m in funding commitments and capital.

TSB Banking Group advanced after it agreed takeover terms with Banco de Sabadell SA (Other OTC: BNDSF - news) in a £1.7 bn deal. Sabadell also edged higher.

In commodities, Brent crude rose 1.32% to $55.16 per barrel, according to the ICE.