Stock markets mixed on eurozone's Greece bailout

Financial markets have given a mixed reaction to the announcement of a second bailout deal for Greece.

The Dow Jones in New York briefly topped the 13,000 mark for the first time since May 2008 before closing nearly flat, while markets in London, Frankfurt and Paris all fell slightly.

The euro was little changed from Monday's closing price.

Shares across Europe rose on Monday in anticipation of a deal being reached, with bank shares doing well.

Europe's banking industry has been bolstered by support from the European Central Bank.

In the latest bailout deal, Greece is to receive loans worth more than 130bn euros (£110bn; $170bn).

In return, it will undertake to reduce its debts to 120.5% of its GDP by 2020 and accept an "enhanced and permanent" presence of EU monitors to oversee economic management.

Greece needs the funds to avoid bankruptcy on 20 March, when maturing loans must be repaid.

'Problems remain'

"Effectively Europe's banks have been given almost half-a-trillion euros at 1%, very cheap money that has sort of ring-fenced the banks from the crisis. The thinking is that banks will not go bust if Greece fails," said Louise Cooper, market analyst at BGC Partners.

But she said few in the markets thought the latest bailout was the answer.

"This just puts off the inevitable. It's the second deal in two years. You're talking almost 20,000 euros per person [in Greece] in total bailout funds and even that amount has not solved Greece's problems. That suggests the money has not been well spent," she added.

"It [the deal] probably avoids a messy and chaotic default on 20 March, there are still a lot of steps to go through before then, but does it solve any of its problems? No."

Also on Tuesday, Bank of Cyprus, the island's largest lender, unveiled a 1bn euro loss for 2011.

The bank said the cost reflected a 60% writedown in the value of Greek bonds it holds.