European Stocks Rally after Greece Approves Austerity Bill

Europe's stock markets climbed on Monday after Greek lawmakers approved drastic austerity measures, amid violent street battles and blazing buildings in the streets of Athens.

In late morning deals, London's benchmark FTSE 100 index jumped 0.99 percent to 5,910.04 points, Frankfurt's DAX 30 added 0.77 percent to 6,744.36 points and in Paris the CAC 40 advanced 0.48 percent to 3,389.43.

In foreign exchange trading, the European single currency increased to $1.3260 compared with $1.3194 late in New York on Friday.

Greek Prime Minister Lucas Papademos pushed through another package of austerity cuts on Sunday, arguing that the measures were "the country's only hope" to avoid economic meltdown and secure another bailout.

However, Athens was rocked by violence, with dozens injured and buildings ablaze as an estimated 80,000 protesters descended on the Greek capital to voice their opposition.

"Investors bought into stocks on Monday after the Greek parliament passed the latest austerity measures needed in order for the indebted country to receive a second bailout," said City Index analyst Joshua Raymond.

"What we have seen today is a relief rally, with investors buying into heavyweight financial stocks on the back of the successful parliament vote in Athens."

Asian markets mostly rose after Sunday's vote. During the debate about 20,000 people took to the streets to demonstrate in Greece's second city of Thessaloniki.

"Last night, the Greek parliament passed the package of spending cuts and tax rises agreed with the EU/IMF," added equities analyst Conall Mac Coille at Davy Stockbrokers in Dublin.

"This means that European finance ministers should on Wednesday (February 15) approve new funding for Greece, ahead of the next 14-billion-euro bond redemption on March 20.

"A formal offer for the new debt swap agreed with private creditors is required by February 17.

"However, both the approval by EU ministers for new funding and the debt swap should now be merely formalities so that the immediate threat of a disorderly default by Greece on March 20 has passed."

The latest austerity package was a key chapter in Greece's fiscal saga with lawmakers racing to secure a second bailout package, and avoid defaulting on its massive debt.

The euro's rise was meanwhile tempered by uncertainty over implementing the austerity plan and ongoing talks between Athens and its private creditors.

"At this stage the passing of the vote by the parliament is now pretty much beside the point," added CMC Markets analyst Michael Hewson.

"The level of public anger demonstrated in Athens over the weekend suggests that implementation risk is going to be a real problem going forward.

"In passing the bill though Greek politicians have effectively thrown the ball back into the court of Eurogroup finance ministers, who are due to meet on Wednesday, where they will have to either ratify the agreement, or reject it as insufficient, and demand more austerity measures."