European stocks extended their biggest rally since 2011, with benchmark gauges of Portugal and Italy surging more than 10 percent in four days, as Greece and its creditors reached an agreement paving the way for a new bailout.

The Stoxx Europe 600 Index rose 2 percent to 396.46 at the close of trading in London, taking its four-day increase to 6.4 percent. Portugal’s PSI 20 Index advanced 1.8 percent, and Italy’s FTSE MIB Index climbed 1 percent. Spain’s IBEX 35 Index added 1.7 percent, sending its four-day jump to 8.5 percent.

A U.S.-listed exchange-traded fund tracking Greek equities fell 3.4 percent after earlier gaining as much as 5.3 percent in New York. American depositary receipts of National Bank of Greece SA dropped 2.5 percent, reversing a 12 percent jump.

Source : Bloomberg